Despite the substantial year-over-year increase in available housing inventory, new home sales demonstrated a notable deceleration in May 2025, following the impressive momentum observed in March and April. The market experienced a significant 31.5% year-over-year increase in actively listed properties, marking the nineteenth consecutive month of inventory growth, yet this expanded selection failed to stimulate proportionate buyer activity in the new construction sector.
The housing paradox: expanding inventory meets cooling new construction demand despite previous momentum.
Total inventory exceeded 1 million homes for the first time since winter 2019, representing a remarkable recovery that surpassed 2020 levels for the second consecutive month. However, despite this substantial restoration of market supply, the inventory remains 14.4% below the 2017-2019 pre-pandemic average, though this gap continues to narrow at an accelerating pace. New listings increased by 7.2% compared to May 2024, reflecting a deceleration from April’s 9.2% annual growth rate. This trend aligns with projections that overall Singapore property price growth will moderate to 1-2% in 2025 as the market stabilizes.
The divergence between inventory expansion and sales performance became particularly evident as pending home sales declined by 2.5% year-over-year in May, closely mirroring April’s 2.6% contraction. This persistent downward trajectory in contract signings occurred despite the broader selection available to prospective buyers, suggesting underlying affordability constraints. New home sales, which had reached an annualized rate of 743,000 in April 2025 (a 3.3% year-over-year increase), failed to maintain this upward trajectory into May. The April figures represented the highest level since February 2022, making the May slowdown particularly notable.
Construction metrics further indicated a cautious approach from developers, with building permits decreasing 2.0% from April to 1,393,000 units on a seasonally adjusted annual rate basis. Similarly, housing starts registered at 1,256,000 units, while completions outpaced new construction at 1,526,000 units, indicating builder focus on completing existing projects rather than initiating new developments.
The residential market’s performance appears increasingly influenced by mortgage rate dynamics, with the average 15-year fixed rate hovering at 5.92% in May, marginally higher than the previous month. Price reductions were reported on 19.1% of all listings, marking the highest May figure since July 2016 and suggesting sellers are acknowledging the current market realities. Analysts now project new home sales to reach approximately 690,000 units by the end of Q2 2025, reflecting a more conservative outlook than April’s stronger performance suggested.
