In the ever-dynamic landscape of Singapore's real estate, the third quarter of 2023 has marked a turning point in the market's trajectory. According to the Urban Redevelopment Authority (URA), private home prices have shown resilience, rebounding by 0.5% quarter-on-quarter (q-o-q). This positive movement contrasts with the 0.2% decline experienced in the preceding quarter, which was a direct consequence of cooling measures announced earlier in the year. Notably, this drop in 2Q2023 marked the first decline in private residential property prices in 12 consecutive quarters.
However, the growth in 3Q2023, although promising, remains notably lower than the robust 2.1% average quarterly price increase recorded in 2022. Several factors have contributed to this cautious sentiment, including developers, buyers, and sellers scrutinizing market data to assess the impact of cooling measures on housing demand. Buyers, in particular, are adopting a watch-and-wait approach due to the increased supply of new homes in recent months. The lunar seventh month also played a role in dampening activity in August and September, with private residential sale transaction volume down 15% q-o-q to 4,569 transactions in 3Q2023, marking a 26% drop compared to the same period last year.
Key Highlights:
- Private home prices rebounded by 0.5% q-o-q in 3Q2023, following a 0.2% decline in the previous quarter.
- Non-landed properties led the price growth with a 2.1% q-o-q increase, driven by new launches.
- Outside Central Region (OCR) and Rest of Central Region (RCR) saw notable price gains, while Core Central Region (CCR) prices continued to decline.
- Landed property prices slid by 4.9% q-o-q but remain in high demand.
- Market sentiment remains cautious due to cooling measures and money-laundering investigations.
- Analysts predict a resilient market, driven by low unemployment rates and upgrader demand.
- New project launches in October and November expected to support transaction volumes.
- Stable prices anticipated in the near term, influenced by economic conditions and interest rates.
The private residential market's resilience is expected to persist despite increased interest rates and cooling measures. A healthy local demand for private housing, low unemployment rates, and continued growth in resale HDB prices all contribute to this positive outlook. With several new projects set to launch in the coming months, transaction volumes are likely to remain robust. However, buyers are expected to remain price-sensitive in the face of a weaker economic environment and higher interest rates. In the first three quarters of 2023, private home prices have already grown by 3.6%.
Stay updated on Singapore's dynamic real estate market. Reach out to us for the latest insights and opportunities.