Yahoo Finance Singapore forecast to see prime residential prices fall in 2024: Savills
According to Savills World Research, Singapore is among 17 global cities forecast to see residential price falls this year (Photo: Samuel Isaac Chua / EdgeProp Singapore)
Across the 30 global cities monitored in the Savills World Prime Residential Index, a positive prime residential price growth of 0.6% is projected for 2024, a drop from the 2.2% achieved in 2023.
According to Savills World Research, Singapore is among 17 global cities forecast to see residential price falls this year. Weaker sentiment associated with higher interest rates and the challenging economic landscape is to be blamed.
Other cities projected to see price falls this year include Hong Kong, London, New York, San Francisco, Los Angeles and Seoul. Capital value growth in these cities is expected to be slower than in 2023.
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"Inflationary pressures will gradually abate — necessitating 'higher for longer' interest rates and the likelihood of a sustained period of weak global growth," says Kelcie Sellers, associate of Savills World Research.
Singapore and San Francisco are forecast to see prices fall in the range of -3.9% and -2%. Projected price falls for London, New York, and Paris will likely be between –1.9% and <0%, while Hong Kong is –10% or lower.
(Source: Savills Research)
Even though prime residential property is less mortgage-reliant than mainstream residential property, weaker macroeconomic conditions are expected to dent sentiment. Thus, many potential buyers and sellers will likely adopt a wait-and-see approach in an environment with a higher interest rate.
A softer market presents opportunities for high-net-worth individuals to buy properties in prime locations. "Wealthy families will also take up this opportunity to invest for the next generation," says George Tan, managing director of Livethere Residential at Savills Singapore.
While the high-end residential market was affected by the imposition of a 60% levy on foreign buyers, "the relatively low supply in this segment will allow the market to find a price floor and, over time, will create a stronger foundation", says Alan Cheong, head of research at Savills Singapore. "This means that with less new supply from 2025 onwards in the high-end residential market, prices will likely reach a point of stabilisation soon."
Chinese cities of Guangzhou, Hangzhou, and Shenzhen are also forecasted to see price falls over 2024 as restrictive government policy to stabilise the property market volatility takes effect.
Sydney and Dubai are forecast to be the two top performers for the year ahead, with both cities set to benefit from increases in their high-net-worth population.
Savills says Sydney is seeing high demand for quality prime homes, but supply remains low. This imbalance will likely persist throughout 2024 and push up prices, which are forecast to increase by 8% to 9.9%.
Dubai increased by 17.4% over 2023, but this growth rate will likely slow this year as it returns to more normal activity. Savills anticipates prices to grow there by a further 4% to 5.9%.
Generally, markets with comparatively lower price points than other world cities look likely to perform well over the coming year. Cape Town, Barcelona, Madrid, and Kuala Lumpur each boast prices below $800 psf and comprise the next four forecast highest growth markets.
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