Private home prices rose 0.8% in Q1 2025, slowing from the 2.3% gain seen in the previous quarter.

Singapore's private residential market continued its cautious ascent in the first quarter of 2025, but industry players are warning of mounting risks from global economic tensions.

According to the Urban Redevelopment Authority (URA), private home prices rose 0.8% in Q1 2025, slowing from the 2.3% gain seen in the previous quarter.

Sales volumes dipped slightly, reflecting a market adjusting to external uncertainties and intense competition among developers.

OrangeTee & Tie noted that whilst prices have risen for two straight quarters, "the resale market exhibited a more subdued performance due to increased competition from the primary market," leading to a 3.7% drop in resale volumes.

New home sales, however, remained resilient, boosted by launches such as Parktown Residence, The Orie, and ELTA, described as "exceptional sales uptake" projects.

On the rental front, OrangeTee said the market has stabilized. "This is the fourth consecutive quarter that price change was within -1 to 1 per cent, showing that rent prices have stabilized in general," the agency wrote.

Looking ahead, OrangeTee warned that Singapore, as a trade-reliant economy, could face headwinds from escalating global tensions.

"Singapore will feel the brunt of the tariff regime as the US is one of our major trade destinations," the firm said, adding that higher tariffs could "raise inflation in the US, potentially causing interest rates to remain elevated for a longer period."

Nevertheless, OrangeTee remained cautiously optimistic, citing strong domestic support. "The private residential market is currently driven by domestic buyers, particularly HDB upgraders, who enjoy strong proceeds from the sale of their flats," it said.

Knight Frank echoed a similar view, noting that whilst homebuyers remained active in Q1, uncertainties are clouding the outlook.

"Despite the unfolding global political and economic uncertainty, so long as unemployment remains low, retrenchments contained and salaries intact, domestic demand in the housing market can be supported," said Leonard Tay, Head of Research at Knight Frank Singapore.

Knight Frank added that private home prices showed "signs of price stabilisation," with a 0.8% quarterly increase, and projected a "moderate [price growth] between 3% and 5% in 2025, similar to 2024."

The agency also pointed out differences across market segments. The Core Central Region (CCR) remained muted due to the 60% Additional Buyer’s Stamp Duty (ABSD) for foreigners, whilst the Rest of Central Region (RCR) saw stronger activity, boosted by launches like The Orie in Toa Payoh.

Both firms stressed that the global situation — particularly the US-led tariff war — could dampen sentiment.

Knight Frank warned that "the unfolding uncertainty triggered by the US-led tariff war, is likely to slow transaction volume as buyers and sellers move into a state of pause until some clarity emerges from the global confusion."