Just Released

This is perhaps one of my most anticipated reports in Singapore and that is the quarterly report by URA!

This time it is a rather long report so I summarised the main points below (of you can catch the video version at the bottom):

💹 Market Trends:

In Q1 2024, the growth in private property prices has shown a noticeable deceleration, increasing by only 1.4% compared to the 2.8% rise in the previous quarter of 2023.

This trend was consistent across both landed and non-landed properties, suggesting a broad cooling in the market acceleration. However, the Central Core Region (CCR) displayed resilience with a continued increase of 3.4%, slightly down from the 3.9% of the previous quarter but still robust.

🙈 Yearly Insights: Looking Back to Look Forward

Reflecting on the year-on-year data, the first quarter of 2023 was particularly strong, with an overall residential increase of 3.3%. Landed properties saw an almost 6% rise, and non-landed at 2.6%, with RCR leading the growth at 4.4%. This historical perspective highlights the cyclical nature of our market, where different regions experience waves of growth at different times.

📦️ Supply Dynamics: The Forecast Ahead

The current projection indicates a concerning shortfall in new unit completions for 2025 and 2026, well below the average annual supply level of approximately 13,000 units.

For 2025, the anticipated completions have been adjusted downward from 6,700 to 6,300 units. While there’s a slight uptick in the projections for 2026 and 2027, this shift suggests tighter market conditions ahead.

This is something I have been talking about and warning my viewers that the supply crunch might be more severe than expected. Therefore, my view of higher property prices in the next few years remains the same.

🧱 Market Response and Resale Transactions

Transaction volumes in the resale market are also on a decline, despite the upward pressure on prices, underscoring a potential supply crunch. Notably, vacancy rates which spiked in 2023 are stabilizing, indicating absorption of the new supply.

🐳 Implications for Investors and Homebuyers

The emerging patterns suggest that while the growth in property prices may moderate, the underlying strength of the market, supported by robust GDP growth and potentially easing interest rates, could revive buyer interest. However, with the projected supply constraints, we might see sustained price pressures.

In conclusion, while Fed might not cut rates soon, it is hard to see any significant drop in SG property prices, unless there is a catastrophic economy downturn where unemployment rises. Otherwise most owners will stay put and hold on to their properties instead of a fire sale. 💎 🖐️ indeed

Wishing you a profitable week ahead,

May Your Profits Grow!

Pete
Invest with Pete