5 Property Trend to Look Out for in 2024
At a time marked by increasing interest rates and inflation, navigating the promising landscape of Singapore’s ever-growing property market may look daunting to the uninitiated. For prospective homeowners or potential investors, it is an opportune time to act and seize this opportunity and reap the rewards. However, it’s important to exercise caution and assess the situation before diving right in.
Here are five trends to take note of before you make your first move.
Trend 1: Lower Interest Rates Catalyst For Homebuyer Demand
While it’s a common belief that there’s a direct relationship between interest rates and property prices, its effect can actually be dismissed as there are several factors to also consider, such as affordability and demand or government policies. The fluctuations in interest rates will have an impact on the average transaction volume in Singapore.
Our first prediction is that interest rates will be dropping steadily over the course of the year. January is marked by subdued market activity as the market contributors are eagerly waiting for the release of job reports and company profit disclosures. These economic indicators when positive will boost consumer confidence, influence investment decisions, and offer an indicator of whether or not it is the right time to contribute.
With the US FED announcing that they are potentially cutting interest rates, market consensus expecting two to three times from 2024 onwards, and inflation rates stabilizing in the US, it is only natural to expect that these positive signs would trickle down to what we would see here in Singapore. In fact, the bank statements can also be an indicator of these changes. UOB at the end of last year, predicted interest rates would plateau and start to decrease. Though they still have to consider the actual results of the economic activity in the US, I can still give a confident estimation that interest rates will be dropping.
Trend 2: More Upcoming Mega Developments New Launches
It’s important to stay on top of what properties are coming onto the market. Here are four new launches for you to compare and analyze. With locations in Toa Payoh, Jalan Tembusu, Lorong Chuan, and Tampines.
The Tampines area, with its reasonable pricing, is one that I would recommend to you. However, also take special consideration of the properties in Toa Payoh, Jalan Tembusu, and Lorong Chuan, as I feel these sites offer the best investment return in the long run. With these developments raking in up to 800 or more units each, it provides a sustainable avenue to profit.You can check out my opinion in mega developments in the link provided here.
Trend 3: Influx of Completed Homes Prompt Resale Resurgence
With COVID delaying construction and postponing projects, 2023 is signaled by a period of chasing these missed deadlines and the rejuvenation of developments. 2023 saw the highest-ever completion of units amassing up to 19000 units and 2024 closely followed with a projected estimate of another 10000 units.
For potential investors, the qualm is whether or not this increased supply results in deductions in transaction prices and buyers expecting lower deals. Let us put your doubts at ease, as the simple answer is no. This is because while we see a shift in supply, this is sustained by an increased demand in the buyer sector.
Previous research highlighted by Singstats, ERA research, and Market Intelligence showed that Singapore is approaching a 6.9 million population, and market trends indicate that we need up to 700,000 new homes, it’s safe to assume that there will indeed be a high demand for new homes.
This change does affect how homeowners will navigate real-estate investments by opting for the resale market instead of turning to the new launch market.
Our national development minister, Desmond Lee, says that he doesn’t expect prices to increase very heavily. If we look at market trends and history in 2020, we’ll notice that prices have been increasing with 2022 marking moderate changes and subtle decreases. This is why I expect it to grow at a sustainable rate of 4% to 6% increase in 2024.
Trend 4: Navigating a Tenant-Friendly Market
These changes do offer an advantage for tenants. Why? Well, as new properties enter the market, there will be more choices for buyers. Additionally, this means that such properties could act as leverage for better deals. Research has shown that there has been a gradual recession since the start of 2023 for rental demand due to the clearing of construction backlog.
If you’re a homeowner or a potential buyer, do take note of two factors which are interest rates and the advantage held by tenants. While an increased interest rate will prompt a higher asking rental price, the tenant will have a huge selection to choose from if your asking price is inflated. Moreover, if the rates were to drop, this would benefit both parties and lower prices can be easily negotiated. For this, we advise you and our clients not to buy a property that you intend to rent out over the next 10 years especially if the property is not close to an MRT station or near amenities—the profit margin to buy and flip in 3 years is higher!
Trend 5: Subdued HDB Price Growth
Back in 2020 in order to curb HDB resale prices growth, our National Development Minister Desmond Lee stated that up to 100,000 homes would be entering the market in 2015. With close to 20,000 properties entering the market in 2024, the government is attempting to subdue the growth of HDB prices in Singapore.
It’s integral to take note of the MOP periods before MOP properties become available. If you’re looking to cash in on your investment, 2024 is the perfect time to do so as the prices will hit their peak. If you delay this and wait another year, you’ll be met with the booming influx of new properties and developments and miss out on potentially your largest price tag.
Prices will slow down as a result and this recommendation is backed up by trends starting in 2008. Over three years in 2011 and 2014, an influx of 100,000 new HDBs entering the market resulted in a price drop of up to 12%. With history repeating itself with another 100,000 homes being completed in 2024, the time to sell is now. The market, when assessed carefully, becomes a cycle of recession and inflation and it’s important to seize opportunities and strike while the iron is hot.
Conclusion
As for my forecast for 2024, let me put this simply. Private new properties and the amount of sales transactions will not have much of a difference compared to previous years. This stability does provide opportunities to those with stable budgets to invest in the sites I mentioned above such as the Tampines, Lor Chaun, or the Toa Payoh sites. If we’re talking in terms of pricing, I predict them to go up roughly 4% to 6% for the private market.
What do these trends mean? How can I compare one area to another so I can really understand an area and feel confident to invest? Still have these burning questions? Arrange a consultation call with me, understand how I use my Property P.L.U.S System, and with all the key data points, show you exactly how I analyze that data.
As for resale prices, the volume translation will also remain more or less the same. Yes, more people will be looking at houses, but the supply will meet this demand. Again, prices will increase sustainability at 4% to 6%.
Finally. for HDB trends, there are three rules to consider. Firstly, volume translation will remain the same with more MOP units entering the market. Price-wise, there will be a slightly muted decrease of 3% to 5% and I predict it will be 3%. This is a result of property prices being moderated.
In conclusion, these are the five trends you should look out for as prospective investors and eager homebuyers in the Singapore market. I’ve given you my own predictions and expectations for the future.
Also check out our testimonials and what other clients have to say about us!