Singapore’s private housing market saw its strongest sales in nine months in August, with buyers snapping up more than 2,100 units as new project launches fuelled demand.
Data from the Urban Redevelopment Authority (URA), quoted in a Bloomberg report, showed developers sold 2,142 private homes during the month, the highest since November 2024, when nearly 2,600 units were sold.
The spike highlights how a mix of fresh supply, intergenerational wealth transfers, and easing borrowing costs is shaping one of the world’s most expensive real estate markets, even as government cooling measures remain in place.
Surge in project launches boosts sales momentum
August’s surge came on the back of multiple new launches across both suburban and prime areas.
The River Valley district, long popular with expatriates due to its proximity to the city centre, drew strong interest from wealthy foreign residents as well as local buyers.
This followed a similarly strong performance in July, with the two months marking a clear rebound in market momentum.
The new supply helped propel overall transaction levels, even as developers paced launches more cautiously in September.
More projects, however, are expected towards the end of the year, which could sustain the upward trajectory in sales.
Shares of local developers have also benefited from the renewed demand, reflecting investor confidence in the property cycle’s resilience.
Declining interest rates and wealth transfers shape demand
One key driver behind August’s sales boom has been the drop in borrowing costs.
Benchmark interest rate closely watched by homebuyers has halved since the beginning of 2024, making financing more affordable for buyers.
Alongside this, an ongoing transfer of wealth between generations is fuelling appetite for real estate as a long-term store of value.
Government data showed that buyers are increasingly drawn to smaller units with more manageable price tags.
The majority of August’s transactions were concentrated in homes priced between S$1 million and S$2 million ($780,000 to $1.6 million).
This range has become a sweet spot for middle-class households seeking private housing, particularly as resale prices for government-built flats continue to climb in line with shifts in the private market.
Cooling measures yet to dent strong demand
Despite repeated government efforts to cool the property market, demand has shown little sign of easing.
Authorities introduced an additional tax in July targeting owners who sell units within a few years of purchase, but August’s data suggests this has not dampened activity.
Previous rounds of cooling measures, aimed at moderating speculative buying, have similarly struggled to curb structural demand.
Singapore remains one of the priciest property markets globally, and affordability concerns are becoming more pronounced among residents.
While the majority of Singaporeans live in government-built housing, rising second-hand prices for these units—often tracking movements in the private sector—underscore the ripple effects of sustained demand for private homes.
Outlook for the rest of the year
With more project launches anticipated towards year-end, momentum in private home sales could extend into the final quarter of 2024.
Developers are expected to continue targeting the S$1 million to S$2 million range, appealing to buyers who remain sensitive to affordability constraints despite falling borrowing costs.
The rebound is likely to spark renewed debate about housing accessibility, particularly as property prices remain on an upward trend.
For now, the balance of market forces—rising supply, intergenerational wealth transfers, and cheaper financing—appears to be sustaining Singapore’s housing market resilience, even as cooling measures attempt to keep pace with demand.
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