Singapore’s Property Market: 3 Private Housing Market Trends in 2024

As we venture into 2024, the Singapore property market continues to evolve under the influence of global economic shifts and local policy adjustments. This year, several key trends are emerging that promise to reshape the landscape of private housing in Singapore. From fluctuating interest rates to adjustments in housing supply and occupancy regulations, these trends not only reflect the dynamic nature of the real estate market but also offer new opportunities and challenges for investors and homeowners alike. Let’s delve into the pivotal developments that are set to define the private housing market this year.

1. Fixed-Interest Home Loans Will No Longer Be

In an effort to stabilise the economic turbulence exacerbated by COVID-19, the Federal Reserve implemented aggressive interest rate hikes. This strategy, while initially necessary, led to a significant increase in home loan interest rates in Singapore, creating a financial strain that persisted well beyond 2022. However, in light of a dim economic outlook, the Fed has pivoted towards a more accommodating monetary policy, hinting at potential rate cuts. These adjustments are anticipated to lower the cost of borrowing significantly, making 2024 an opportune time for prospective homebuyers to consider securing a home loan, particularly in the latter half of the year. This shift is poised to rejuvenate the real estate market by making homeownership more accessible at a time when many are recalibrating their financial strategies.

Facing these upcoming changes, those planning to purchase new properties should closely monitor the interest rate trends. With the expected reductions in rates, the overall affordability of loans for buying homes is likely to improve, thereby increasing buyer interest and activity in the private housing sector. Prospective buyers might find the latter 2024 to be a good time to enter the market and buy private property in Singapore, especially as the adjustments aim to stimulate growth by making financing more attainable for a wider population.

2. Stabilising of Property Prices as the Supply Crunch Tides Over

2024 marks a pivotal year for the stabilisation of Singapore’s private property market, thanks largely to strategic government interventions and tightened mortgage policies. These measures have effectively curbed the steep climb in property prices, a welcome relief from the rapid increases seen in previous years. Last year, the average private home price rose by 6.7 per cent, a deceleration from the 8.6 per cent increase in 2022.

Furthermore, the market is anticipating the launch of 31 new property launches, which will introduce approximately 12,000 new private homes. This includes RCR projects Terra Hill as well as The Botany at Dairy Farm, a new condo at Hillview. With several large projects expected to dominate these launches, a surge in sales might be on the horizon. Although a dramatic drop in prices is unlikely, the increased supply is expected to temper the previous frenetic pace of price increases, providing a more balanced market for buyers.

This new influx of units comes as part of a broader real estate trend that seeks to address the demand for private housing while managing price growth. Large-scale projects, often featuring comprehensive amenities and strategic locations, are set to play a crucial role in driving market dynamics. Buyers should anticipate a competitive market with more choices, potentially easing the pressure on prices further. This scenario presents a unique opportunity for both first-time buyers and seasoned investors to find value in a market that is slowly stabilising from the tumultuous fluctuations of the past years.

3. Higher Occupancy Caps to Benefit Landlords and Tenants

In a move to address the tight rental market, Singapore has revised its occupancy regulations, allowing up to eight unrelated individuals to reside in larger public flats and private homes, up from the previous cap of six. This policy adjustment applies to HDB flats of four-room size or larger, certain HDB commercial properties with substantial living quarters, and private residences of at least 90 square meters.

This increase in permissible occupancy is expected to benefit landlords by boosting rental income potential and tenants by making rentals more affordable. With the option to share accommodations with additional roommates, tenants can distribute the cost more effectively. Coupled with an anticipated increase in housing supply, these factors will likely to lead to a dip in rental rates, thereby enhancing tenants’ bargaining power in 2024.

Landlords stand to gain significantly from this policy change as they can now accommodate more tenants, thereby maximising their rental yields. For tenants, the new rules mean more options for shared housing, which could reduce individual rental costs substantially. This shift is expected to bring some relief in the densely populated urban areas where rental prices have skyrocketed in recent years. Additionally, as the market adjusts to these changes, overall rental dynamics within the private and public housing sectors may evolve, leading to a more fluid and flexible housing market conducive to the needs of a diverse population.

Stay Informed to Make Strategic Decisions

As we look toward the horizon of 2024, the Singapore property market shows promising signs of transformation. The anticipated adjustments in home loan interest rates, along with efforts to stabilise property prices and increase occupancy caps, are set to create a more balanced and accessible market. For those navigating the complexities of real estate investment or seeking to establish a new home, understanding these trends will be crucial. In the ever-evolving landscape of Singapore real estate, staying informed and agile will be key to making the most of the opportunities that lie ahead.

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