Private home prices expected to rise 0-3% in 2025

Around 8,200-8,300 units may launch in 1H25, with sales recovering to 6,000-7,000 units in 2025.

Private home prices are seen to rise modestly by 0-3% in 2025, supported by a wave of new launches.

In a report, CGS International (CGSI) noted developers estimate 8,200-8,300 residential units could hit the market in 1H25, with new private home sales volumes forecasted to recover to 6,000-7,000 units in 2025.

Developers are trading at a 58% discount to RNAV and 0.52x FY24F P/BV, between -1 and -2 standard deviations of their 10-year average, with those more exposed to the residential segment poised to benefit from a recovery in home sales.

Despite seeing value in developers at these levels, CGSI cautioned that a tempered rate cut outlook could limit significant share price outperformance in the near term.

Meanwhile, it said the lower interest rate environment in Singapore could boost residential property buying interest. 

CGSI retained its neutral stance on the sector, naming CapitaLand Investment (CLI) as its top pick, followed by UOL. Among small caps, CGSI favored property broker PROP.