Monday, 23 December 2019Property market in 2024: Mixed fortunes but with strong finishThe property market in 2024 experienced a tale of two halves, with sluggish activity in the first half giving way to a surge of buying in the final months.
The property market in 2024 had two distinct halves, each with its own contrasting trends. According to Huttons Data Analytics, the first half saw a sluggish market, with the lowest number of units launched for sale since 1H1996. This was reflected in the sales volume, with only 1,889 units sold – the lowest figure since 1996.
However, there were a few exceptions, such as the 533-unit Lentor Mansion, which achieved a 75% take-up rate during its launch weekend in March. Other project launches in 1H2024 saw relatively lacklustre sales compared to 2023. Mark Yip, CEO of Huttons Asia, notes that this could be due to market uncertainties and high interest rates, causing buyers to hold back on their purchases. They may have been waiting for highly anticipated projects to be launched later in the year, such as Chuan Park and Emerald of Katong.
During this time, buyers were advised to search for the latest New Launches to stay updated on transaction prices and available units.
However, the launch of the 276-unit freehold Kassia on Flora Drive in late July, which achieved a 52% take-up rate, created a shift in sales momentum after the Lunar Seventh Month. This was followed by the launch of the 158-unit 8@BT at Bukit Timah Link in September, where 53% of the units were snapped up over the launch weekend at an average price of $2,719 psf.
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In 3Q2024, new home sales increased by 60% q-o-q, marking a significant change in market sentiment. This was attributed to the 50-basis point interest rate cut by the US Federal Reserve in September. Another sign of growing buyer confidence and demand was seen on Oct 5, when more than 50% of the 226 units at Meyer Blue were sold in private sales, with units transacting at an average price of $3,260 psf, setting a new benchmark for the prime District 15 enclave on the East Coast.
The 348-unit Norwood Grand in Woodlands also saw strong sales momentum, achieving a take-up rate of 84% during its launch weekend in October. This made it the best-selling project in terms of percentage of sales as of October, with units transacting at an average price of $2,067 psf. This marked the first time a project in Woodlands surpassed the $2,000 psf threshold, and it was also the first new private residential project to be launched in the area in 12 years. According to Yip, this strong performance was a clear signal of growing buyer confidence and demand, and it triggered a tidal wave of activity in November.
November saw a record-breaking six new projects comprising 3,551 units being launched over a period of 10 days. It began on Nov 6 with the launch of the 367-unit The Collective at One Sophia, followed by the 366-unit Union Square Residences at Havelock Road on Nov 9. Momentum continued to build up with the launch of the 916-unit Chuan Park on Nov 10, and it surged over the weekend of Nov 15-16 with three projects launched in concert: the 846-unit Emerald of Katong, the 552-unit Nava Grove, and the 504-unit Novo Place executive condo (EC).
As a result, developer sales in November skyrocketed to 2,557 units – the highest figure since March 2013. This pushed total developer sales for the first 11 months of 2024 to 6,344 units, and it is expected to surpass the 6,421 units sold in 2023 by the end of the year. According to Yip, this reflects the strength and resilience of the property market and underscores the enduring appeal of property as an asset for wealth creation and preservation.
Siew Chuin, JLL’s head of residential research, says that the sluggish performance of the private residential market in the first three quarters of 2024 created an atypical year-end scenario. Many developers had postponed their launches due to economic uncertainties and hopes for improved conditions, but they finally rolled out their projects in November. This decisive shift from caution to action was prompted by the approaching year-end festive lull and improved market sentiment since 3Q2024.
She adds that the surge in activity has transformed November into an unusually vibrant period for property launches, defying the typical seasonal slowdown and creating a dynamic market environment. As a result, speculation about the possibility of further property cooling measures has become rampant, given the uncharacteristically high November sales.
However, Chia believes that any intervention is unlikely, despite the impressive sales figures in November. She states that the market exuberance during that time was mostly driven by a year-end rush to launch projects. She adds that such intervention will only occur if there is sustained sales momentum into the first quarter of 2025 and a concurrent sharp increase in property prices outpacing GDP growth.
She concludes that any new measures are unlikely to be imposed unless there are clear signs of persistent market overheating.