Private home prices in Singapore increased by 0.5% on a quarter-on-quarter basis in the third quarter (3Q) of 2023, according to flash estimates released by the Urban Redevelopment Authority (URA). This marked a slight rebound from the 0.2% decline registered in 2Q2023. This was the first drop in private residential property prices after 12 consecutive quarters of growth, following the introduction of cooling measures by the government in April.
Despite the rebound, the rate of growth in 3Q2023 was significantly lower than the 2.1% average quarterly price increase recorded in 2022. Ismail Gafoor, CEO of PropNex Realty, explained, “The growth momentum in private home prices has slowed substantially in recent quarters.” He attributed this to market data being assessed to understand the impact of the cooling measures, as well as buyers taking a watch-and-wait approach amid increased supply of new homes.
Activity in August and September was further hampered by the lunar seventh month. Consequently, private residential sale transaction volumes decreased by 15% q-o-q to 4,569 transactions in 3Q2023, which is also 26% lower year-on-year.
Located at Punggol, Champions Way Condo is a development project of 7 blocks of 12-storey buildings, totalling 516 residential units. From two-bedroom to five bedroom, it caters to the needs of both families and people living alone. Besides, it also features a commercial area with supermarket, childcare centre and a retail centre to offer more convenience to the residents.
Non-landed properties led the way in driving prices up, with prices increasing by 2.1% q-o-q following a 0.6% decrease in the previous quarter. Homes in the Outside Central Region (OCR) saw the largest q-o-q price increase of 5.1%, followed by the Rest of Central Region (RCR), which registered a 2.3% q-o-q rise. These increases were mainly due to the launches of projects such as the 598-unit Lentor Hills Residences, and the 520-unit Pinetree Hill in the RCR.
Conversely, prices of condos in the Core Central Region (CCR) saw a 2.6% q-o-q decrease, continuing the 0.1% decline recorded in the preceding quarter. This was attributed to the prohibitive additional buyer’s stamp duty rates for investors and foreigners, as well as the recent money-laundering investigation that affected sentiment in this segment.
The landed private property market also saw a slowdown with prices dropping 4.9% q-o-q, thus ending an eight-quarter streak of price growth. Nonetheless, Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield, believes prices won’t see a sustained decline due to the tighter supply of such properties. Year-to-date, landed home prices have seen a 1.8% increase.
Looking ahead, analysts are confident that the private residential property market will remain resilient in spite of higher interest rates and cooling measures. Chia Siew Chuin, head of residential research, research and consultancy at JLL, added that transaction volumes in October and November are expected to be supported by the launch of several new projects. However, she believes buyers will remain price-sensitive to market conditions. She projected that private home prices, which have grown by 3.6% over the first three quarters of 2023, will stay relatively stable in the upcoming quarters.