The prices of private residential properties rose by 0.4% q-o-q in 4Q2022. This was slightly higher rate that what was recorded in the 0.2% q-o-q increase indicated in the estimates flash released by URA on the 3rd of January. However, it’s an impressive drop compared to 3Q2022, which saw a 3.8% q-o-q increase that was observed in the third quarter of 2022.
In the entire 2022 year prices for private residential properties rose up by 8.6%, moderating from the 10.6% price increase in 2021.
Skywaters Residences launch will generate the same or more office space than the current building based on Net Lettable Area (NLA).
The increase in prices for non-landed goods during the quarter was led to sales within the Rest of Central Region (RCR) that recorded an rise of 3.1% q-o-q, maintaining a record-breaking run of 2.8% q-o-q increase in the 2Q2022.
As per Tricia Song, the head for research Southeast Asia, at CBRE The increase was driven by the high prices on current project Riviere and One Pearl Bank that were included among the 10 top most-sold projects of 2022.
Other projects that are on the listing are Lentor Modern located in the Outside Central Region (OCR) with the median price of $2,108 per square foot for 2022. Normanton Park in the RCR, with an average price of $1865 per square feet and Amo residence within the OCR with a median cost of $2,110 per square foot.
OCR prices started off from an extremely high starting point and therefore saw the 2.6% q-o-q decline in 4Q2022, which was down from the 7.5% q-o-q hike in the preceding quarter. In 2022 as a whole, RCR prices increased 9.7% year-over-year, and OCR prices increased 9.3% y-o-y, based on research conducted by CBRE.
Along with the lack of new launches within the OCR that could push price upwards, the rising rates of interest and tighter borrowing requirements contributed to the according to Nicholas Mak, head of research and consulting of ERA Realty.
“Most of those who purchase OCR privately owned housing like HDB upgraders, tend to be more price-sensitive and have lower cash reserves for purchase of homes. Therefore, the demand for housing in private homes from this segment of buyers will be significantly affected by the cooling measures in September 2022 measures, which are accompanied by the higher interest rates,” the expert adds.
Market for a subdued launch
In terms of volume of transactions in the quarter ended December 31, sales were to a comparatively low 690 units on the new launch market, while 2898 units traded hands on the second market. In FY2022 the number of new sales, and 14,791 resales as well as sub-sales.
It’s 21,890 transactions. This represents the equivalent of a 34.8% decrease compared to the 33,557 units that were sold in 2021. Based on Leonard Tay, head of research at Knight Frank Singapore, this is not due to a shortage of demand for homes and the absence of available inventory for sale available on the market.
He continues: “The handful of notable new launches during 4Q2022 the imminent global recession and the high-interest rates has also led to transaction activity slowing towards the end of the year due to the absence of available listings forced homeowners to adopt an open-ended approach until more homes become available.”
Developers were cautious and only released 504 units available to be sold in 4Q202, according the CBRE Song. In the last quarter, new projects introduced for the first time included Kovan Jewel (34 units), Enchante (25 units), Hill House (72 units) along with Sophia Regency (38 units).
“The take-up rate was generally moderate at these new launches, since home-buying enthusiasm in Q42022 was hurt due to the worsening macroeconomic environment as well as the high mortgage rates” she says.
A handful of home sellers are landed
The prices in the landed home market increased by 0.6% q-o-q last quarter which brought the total rise for 2022 at 9.6%.
“Prices of homes that are landed have continued to increase, but are limited by sellers’ resistance to put their houses for sale,” says Knight Frank’s Tay. “Even although buyers are prepared to provide reasonable price premiums for homeowners who own land to sell, the majority of them were reluctant to selling their homes, and some were swayed due to the lengthy wait time of 15 months for those looking to downgrade their homes and purchase HDB Flats.”
This is a reference to the most recent property cooling measures that were announced on September 30, in the year before, which impacts private property homeowners looking to buy an resales five or four-room HDB apartment by giving them a 15-month waiting period following the sale of their own property. ( Find HDB flats available for rental or for sale in the Singapore HDB directory )
Buffet spread 2023 releases
The overall optimism that was the property market in 2022 was hindered by a dearth in new projects, the coming year will witness a flurry of ready-to-launch new projects enter the market. More than 40 new developments are anticipated to be ready for launch this year.
“The new launches for 2023 should bring some relief from the shortage situation , and will provide buyers with more options of products in various locations,” says Tay.
However, he warns that the expected increase in sales volumes is occurring amid economic uncertainty, job cuts in the tech sector and the continued rise in interest rates , and the increasing cost of living.
However, the fundamentals remain to propel the private residential market in Singapore according to Chia Siew Chuin, the head of research on residential homes, research and consulting for JLL Singapore. “Healthy liquidity of the household, competitive employment market and the appeal to Singapore as a safe haven for foreign investors are likely to continue to fuel home buying interest,” she notes.
She says the anticipated return of mainland China is likely to increase demand for goods here.
The debut of a new launch this year with two-68 unit Sceneca Residence at Tanah Merah Kechil Link, had a strong result in sales that saw the sale of 60% of the units available. “This positive result should help to be a source of confidence in the strength in the marketplace and establish the stage for the next launches scheduled for Feb and Mar,” adds Lee Sze Teck who is the senior director for research for Huttons Asia.