Singapore ranked 23rd out of 30 cities in terms of prime residential property price growth in Savill’s 1H2024 prime residential index released on Aug 8. The index measures and ranks the average capital value growth of prime residential properties over the first six months of 2024.

The index showed that 18 of the 30 cities tracked saw capital growth in their prime residential property market while the next seven cities recorded a fall of less than 1%.

Singapore registering an overall drop of 0.3% in prime residential property prices. The city state’s performance also fell short of the global average price growth of 0.8% recorded in 1H2024.

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According to Alan Cheong, executive director of research and consultancy at Savills Singapore, the lack of new prime residential launches for 1H2024 exerted downward pressure on the market.

He explains that historically, new luxury project launches would set benchmark prices, which in turn would lift prices across the market. Furthermore, the Additional Buyers Stamp Duty (ABSD) of 60% payable for non-permanent resident foreigners has deterred them from the market.

“However, in 2Q2024, we are seeing more foreign participation in the market,” adds Cheong. He predicts that more permanent residents (PRs) could be committing to buying private residential properties in the foreseeable future as they only incur an ABSD of 5%.

Cities in Southern Europe and the Middle East took the top end of the index with Lisbon taking the top spot, registering a growth of 4.2% in 1H2024. It was followed by Amsterdam, Madrid and Athens taking the second to fourth places, each registering a growth of over 3%. Dubai rounded out the top five places with its price grwoth of 2.9% over the same period.

However, cities within the Asia Pacific region are showing divergent growth. Prime residential properties in Bangkok, Sydney and Mumbai saw prices increase by more than 2.5% each on the back of high demand and limited supply.

Meanwhile, prime residential markets in Hong Kong and Mainland Chinese cities registered an average capital value drop of 1.1%. Despite the rollback of cooling measures in Hong Kong and government measures to support the housing market, prices in Beijing, Hong Kong, Shenzhen, Hangzhou and Guangzhou have slipped so far this year. Only Shanghai saw a capital appreciation of 0.1% in its prime residential market.

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According to the report, the high borrowing rates in Hong Kong, which is linked to US Federal Reserve rates, and the low numbers of buyers in Mainland China are some of the key factors influencing the price drop.

“Looking ahead, we predict an average capital value growth of 0.5% for the second half of the year,” says Kelcie Sellers, associate director of Savills World Research. This will bring their forecasted growth for prime residential assets globally in 2024 to 1.3%.