Singapore private home prices rose at slower pace of 6.7% in 2023

SINGAPORE: Private home prices in Singapore rose at a slower pace for the second consecutive year in 2023, increasing 6.7 per cent compared with 8.6 per cent in 2022 and 10.6 per cent in 2021.

In the final quarter of 2023, private home prices rose by 2.7 per cent, faster than the figure of 0.8 per cent in the third quarter, according to flash estimates released on Tuesday (Jan 2) by the Urban Redevelopment Authority (URA).

This was mainly driven by sales at some newly launched projects towards the end of the year.

Huttons' senior director of data analytics Lee Sze Teck noted "robust sales" of three major non-landed launches in November - Hillock Green, J’den and Watten House.

"It is an indication of the ample liquidity of local buyers as foreigners opt out after the increase in ABSD to 60 per cent in April 2023," he added, referring to the additional buyer’s stamp duty.

"Singaporeans and permanent residents made up 98.5 per cent of purchases in 4Q 2023 while foreigners account for a mere 1.5 per cent."

The ABSD was doubled for foreigners and increased for Singaporeans and permanent residents buying more than one property, as part of cooling measures introduced in April. It was the third round of cooling measures since December 2021.

Chief executive officer of ERA Singapore Marcus Chu said although the ABSD hike in April was a "curveball" in 2023, the residential sector may have found its footing with the gradual return of local buyers in the fourth quarter.

Ms Christine Sun, senior vice president of research and analytics at OrangeTee and Tie, noted that the faster growth in the fourth quarter was driven by price increases in the prime areas or the core central region (CCR) at 4.2 per cent, as well as the suburban areas or outside the central region (OCR) at 4.6 per cent.

Prices for the rest of the central region (RCR) dipped 1.2 per cent for the quarter.

The volume of transactions fell by about 27 per cent on a quarter-on-quarter basis in the fourth quarter.

For the whole of 2023, sale transaction volume fell by about 15 per cent compared with 2022.

"This was the lowest annual sale transaction volume since 2016," said URA.

OUTLOOK FOR 2024

In 2024, there may be up to 38 launches with an estimated 11,590 units, including an executive condominium project, according to Mr Lee.
 
There could potentially be up to 12 launches in the first quarter alone, with Ardor Residence, Hillhaven, Lentoria, The Arcady at Boon Keng and The Hillshore slated for launch before the Chinese New Year.

The property market is expected to remain stable due to the continued interest from investors and local homebuyers, said Ms Sun.

"In 2023, the increased supply of completed condos has already helped to stabilise prices substantially, and we anticipate this trend to continue in 2024," she added.

"The property market is also expected to benefit from an improving economy and better job prospects, which will help spur demand for properties."

Analysts estimate that price growth may continue to moderate, rising by around 3 to 6 per cent for the whole of 2024.

URA noted that the government has ramped up housing supply via the government land sales (GLS) programme.

"The increased private housing supply from the GLS programme will be ready for sales launch in the coming year or so, to cater to purchase demand and help keep prices in line with economic fundamentals," it added.