Private home prices edge up 0.5% q-o-q in 3Q2023: URA flash estimates

Private home prices in Singapore reverse downward trend, up 1.7% in 4Q2021: URA flash estimatesPrivate home prices in Singapore increase 0.4% q-o-q in 3Q2021: URA flash estimate
Private residential sale transaction volume fell 15% q-o-q to 4,569 transactions in 3Q2023, a 26% drop y-o-y. Nonetheless, the slight rebound of 0.5% in private home prices in 3Q2023, compared to the 0.2% decline in 2Q2023, reflects a growing sense of caution as developers, buyers and sellers parse market data to assess the impact of cooling measures on housing demand.

In contrast to the average quarterly price increase of 2.1% recorded in 2022, the growth in 3Q2023 remains significantly lower, and is likely attributable to buyers watching and waiting on their property purchases amid a plentiful supply of new homes. Ismail Gafoor, CEO of PropNex Realty, notes that activity was more muted in August and September due to the lunar seventh month.

The growth in private home prices was predominantly driven by non-landed properties, which saw a 2.1% q-o-q rise in prices in 3Q2023, rebounding from a 0.6% decrease in the previous quarter. Homes in the Outside Central Region (OCR) led the way, with prices growing 5.1% q-o-q, followed by the Rest of Central Region (RCR), where prices increased 2.3% q-o-q.

Conversely, condo prices in the Core Central Region (CCR) fell 2.6% q-o-q, extending the decline of 0.1% registered in the previous quarter. The segment remains weighed down by prohibitive additional buyer’s stamp duty rates for investors and foreigners, as well as an investigation into money laundering that has further dimmed sentiment.

The landed private property market also moderated in 3Q2023, with prices sliding 4.9% q-o-q – a reversal from the 1.1% increase recorded in 2Q2023, which broke an eight-quarter streak of price growth. Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield, doesn’t anticipate a sustained decline in landed home prices, as landed homes remain in low supply and are actively sought by locals. Year-to-date, landed home prices are up 1.8%.

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Chia Siew Chuin, head of residential research at JLL, believes local demand for private housing should remain healthy, with several potential launches of new projects, including Watten House, The Hill @ one-north, Hillock Green in Lentor Central and J’Den, in October and November. Nonetheless, with 19 new projects already launched in 2023 and pent-up demand likely satisfied, buyers will be increasingly price-sensitive. Chia expects private home prices, which have grown 3.6% over the first three quarters of 2023, to remain relatively stable in the next few quarters.

Despite the cooling measures and higher interest rates, Wong believes the private residential market is still resilient, reflecting low unemployment rates and a strengthening HDB resale market that is supporting upgrader demand. With this in mind, Cushman & Wakefield is projecting 2% to 5% price growth for private residential properties in 2023.