Houses in the Cluny Hill area, near Botanic Gardens in Singapore. (Photo: Bloomberg)

SINGAPORE — Singapore private home prices grew at a slower pace in the first quarter, surprising analysts who had expected a bigger rise after months of renewed interest in new projects.

An index of private residential prices gained 0.6% from the preceding three months, according to a preliminary estimate released by the Urban Redevelopment Authority Tuesday. That compares with a 2.3% increase in the fourth quarter of 2024.

The small lift was "mildly surprising" after red-hot demand for new launches, said Nicholas Mak, chief research officer at property portal Mogul.sg. He said an easing of second-hand condo price growth may have been a contributing factor.

Overall private home transactions fell by about 15% on a quarter-on-quarter basis, although the data is only tabulated until mid-March. Final house price and transaction data for the first quarter will be released on April 25.

In recent months, buyers in the city-state have flocked to purchase new homes in suburban districts. More people are looking for apartments to take advantage of lower interest rates and a chance to make a quick profit by flipping condos. Developers meanwhile have become more aggressive in acquisitions of suburban land, with one parcel near the eastern beachfront attracting eight bids.

Analysts at Morgan Stanley and Citigroup Inc have talked about possible government intervention if property prices rise too quickly. Housing affordability is a major issue for voters ahead of the country's national elections that must be held by November.

"We are seeing early signs of moderation in price growth across both the public and private housing markets," said National Development Minister Desmond Lee in a Facebook post. He said the government is seeking to maintain a strong supply of housing to meet homebuyers’ needs.

Prices for second-hand public housing increased by 1.5% compared with the prior quarter in a separate estimate released Tuesday. This compares to a 2.6% jump three months earlier. Shifts in private home prices typically go in tandem with those for government-built homes, where most of the population lives.

Despite the moderation, private home prices are still up 3.1% on a year-on-year basis.

Singapore has imposed multiple rounds of curbs in recent years in a bid to dampen a surge in prices that got turbo-charged during the coronavirus 2019 (Covid-19) pandemic. That includes ramping up supply and doubling the tax rate on most foreigner purchases of private homes to 60%, one of the highest in the world.