Singapore Private Home Prices Rise 0.6% in Q1 Amid New Launches

Singapore's private home prices rose 0.6% in the first quarter of 2025, marking a moderation from the 2.3% increase in the previous quarter. This growth was driven by a surge in new launches, particularly in the Rest of Central Region (RCR) and Outside Central Region (OCR), which attracted buyers with competitive pricing and modern amenities. However, the secondary market saw a significant decline, with sales dropping 24.2% quarter-on-quarter. This shift in buyer preferences raises questions about the overall health of the Singapore private housing market and its potential evolution in the coming quarters.

New Launches Drive Price Growth

The RCR and OCR saw robust demand for new launches, which set benchmark prices in their respective locales. The Orie, a new launch in Toa Payoh, sold 86% of its units at an average price of $2,704 psf, setting a new benchmark in the mature estate. Similarly, Parktown Residence in Tampines and Elta in Clementi sold 87% and 65% of their units, respectively, at competitive prices. These launches capitalized on pent-up demand and scarcity in established areas, driving price growth in the RCR and OCR.

Secondary Sales Decline

The 24.2% quarter-on-quarter decline in secondary sales reflects a shift in buyer preferences toward new launches. Buyers are attracted to new projects for their modern amenities, better pricing relative to secondary homes, and perceived value. This has reduced demand for resale properties, weakening secondary market liquidity. Sellers in the secondary market may face pressure to lower prices to compete with new launches, potentially leading to a stabilization or decline in resale prices.

Market Segmentation and Liquidity Concerns

The primary market remains robust, with 3,330 units sold in Q1 2025. However, secondary sales now account for only 49.9% of total transactions, signaling a divergence between primary and secondary markets. Reduced secondary sales could limit liquidity in the resale sector, making it harder for homeowners to exit or upgrade. This may deter investors and long-term buyers, further slowing transaction volumes.

Evolution of the Trend in Coming Quarters

The trend of new launches driving price growth is likely to persist, as developers focus on high-demand OCR/RCR areas. However, government supply increases and economic uncertainties could further dampen secondary sales, leading to price corrections in less desirable locations. The market may bifurcate, with primary sales supporting price stability in strategic areas and secondary sales remaining sluggish until demand recovers or pricing adjusts.

Conclusion

The 0.6% rise in private home prices in Q1 2025 reflects a structural shift toward new launches, driven by competitive pricing and modern amenities. This trend is likely to persist, but government supply increases and economic uncertainties could further dampen secondary sales. The market may bifurcate, with primary sales supporting price stability in strategic areas and secondary sales remaining sluggish until demand recovers or pricing adjusts.