(Oct 23): Singapore’s private home prices rose the most in almost two years and rents jumped, in a sign that the market remains buoyant even after a recent slowdown in sales.

An index of private residential property surged 1.4% in the three months ended Sept 30, according to final figures released on Friday by the Urban Redevelopment Authority. That matched the preliminary estimate and exceeded a 0.5% increase in the second quarter. Rents for private residences climbed 1.3% from the previous three months, the biggest gain in more than three years. 

Wealthy locals and foreign immigrants have driven demand in Singapore’s private property market, making it among the most expensive in the world. Sales have cooled in recent months, mostly reflecting a lack of new projects, although analysts are watching whether sentiment will withstand a recent uptick in interest rates and slower growth in the economy. 

The authority has long warned about a “highly uncertain” macroeconomic outlook, adding in October that it also applied to global and domestic interest rates.

Despite the recent lull in new project releases, price increases for apartments in suburban areas and luxury houses continued to boost valuations. About 5,146 units were transacted in the quarter, down about 16% from the previous three months, due largely to fewer new homes being sold.

Many analysts expect private home prices to continue rising into 2027, albeit at a slower pace. Bloomberg Intelligence sees values climbing 1% next year, due to factors including rising interest rates. Prices this year are on track to increase more than 3%, barring a major drop in the last quarter, extending a rally to a decade.

A fresh indication of future demand will come at the end of October, when a megaproject with 1,268 units goes on sale. Sales of smaller-scale boutique projects released recently have been mixed so far, with only a fraction of units bought.

The bulk of locals in the city state live in government-built homes, which are sold at subsidised prices when new. Second-hand prices for public housing, traditionally a political hot potato, have declined slightly for three straight quarters after a years-long rally. 

Uploaded by Tham Yek Lee