Private home prices up 2.7% in Q4, taking full-year rise to 6.7%

PRIVATE residential prices for property in Singapore have risen 2.7 per cent for the fourth quarter of 2023. This was pulled up by sales at new launches with prices that match new benchmarks amid a an absence of transaction volume.

The price index rose by 6.7 percent during the fourth quarter, less than 8.6 percent in 2022 and 10.6 percent in 2021.

Tan Tee Khoon, PropertyGuru country manager for Singapore, pointed out that the fluctuation in prices over 2023 could indicate that private property prices may have been at their highest.

Tricia Song is CBRE’s head of research for Singapore and South-east Asia. She said that the prices of private homes have grown for seven straight years after the bottom was hit in the end of 2017. She noted that prices are up 32,3 percent over the Q1 2020 trough.

Much of 2023’s price rise was due to the suburban non-landed market that saw prices rise 13.8 percent over the course of the year, according to Song. Outside Central Region (OCR) price rises far outpaced the prices within the city-outskirts regions of the Rest of Central Region (RCR), which rose by 2.7 percent as well as the prime Core Central Region (CCR) prices which were 2.1 per cent higher year over year.

Quarter-on-quarter (qoq) Private condo prices within the OCR were up 4.6 per cent, following a 5.5 percent increase in the third quarter. The prices in the CCR increased slightly less than the CCR average, at 4.2 percent. But they have recovered from the 2.7 decrease of 2.7 percent that occurred in the previous quarter.

The fourth quarter featured two launches launched at benchmark prices and they saw unexpectedly large sales. CapitaLand’s J’Den, in Jurong East, sold 323 units for an average of S$2,451 per square foot (psf) when it launched. UOL and SingLand’s Watten House in Bukit Timah, sold 100 units at an average of $3230 per sq. foot.

The two projects contributed to about 50% of the new sales in the respective OCR and CCR segments in Q4 reported Cushman and Wakefield’s research director Wong Xian Yang.

In the RCR, prices fell 1.2 per cent in Q4 following an 2.1 percent increase during the preceding quarter. Certain projects might have sold their last un-sold units for sale, contributing to the decline in the RCR index, said Song. These include Liv @ MB at Mountbatten and Myra at Potong Pasir. One Pearl Bank Condo in Outram is also fully sold.

Analysts said that the lower sales for Q4 as well as the year as well as slow price increases outside of the OCR indicated a higher degree of buyer resistance to prices that are too high.

Cushman & Wakefield’s Wong pointed out that current non-landed price levels are at their highest levels in the past as of Q4 2023. He stated that, compared to prices prior to the pandemic (Q4 2019), CCR RCR and OCR’s non-landed price levels are rising by 11 percent, 37 percent and 40 percent respectively.

Knight Frank’s head of research Leonard Tay said that although household balance sheets were healthy, buyers “have been and will continue to be cautious” when it comes to their home choices.

Lee Sze Teck noted, however Lee Sze Teck noted, however, that Huttons’ senior director of data analysis Lee Sze Teck said the high sales during Q4’s launches was evidence of “ample liquidity for local buyers”, since foreign buyers had stayed away after the hike in Additional Buyers Stamp Duty (ABSD) which was last April.

In Q4, Singaporeans and permanent residents accounted for 98.5 percent of buyers for private homes, while foreigners made up 1.5 percent.

Based on caveats data as of January. 2nd, 2024, the quantity of purchases made by foreigners in the fourth quarter of 2023 decreased from 271 in Q1 2020 when compared with 62 in Q4 2023. Lee declared that this was the lowest since December 2011, when the ABSD was first launched by the government.

The number of transactions fell over the course of the course of the year. Based on flash estimates released by the Urban Redevelopment Authority (URA) on Tuesday (Jan 2) The total sales transactions of private homes up to mid-December was 27 percent lower than that of Q3 and fell to 3,800 units in Q4.

The total number of units sold during the year was 18,510, which is a drop of 15% from the 21,890 sold in 2022. It’s also the lowest annual volume of sales since 2016, according to URA. This figure includes new sales, resales and subsales, and excludes executive condominium units.

The final quarter of this year witnessed a booming performance for land-based properties. The price of landed homes rose in 4.5 percent, and reversed the drop of 3.6 percent during the previous quarter. In 2023, the landed property price increased 7.8 percent rising from 9.6 percent in 2022.

The demand for freehold homes remains “evergreen” as stated by Knight Frank’s Tay, and “the major obstacle to deals being successfully completed will be the small inventory of stock that is available for sale”.

The 4.5 percent increase could be caused by a slight increase in the number of detached house transactions in Q4, which was 43 units in Q4 as opposed to 39 in the previous quarter, said Ismail Gafoor, chief executive officer of PropNex Realty. The cost of detached homes increased by 16 percent, qoq at S$1,714 per square meter on land. This could have helped offset lower prices in semi-detached and terrace housing segments, he explained.

Marcus Chu, CEO of ERA He said that homeowners who own land are more likely to want higher prices, and also be less inclined to sell. The more landed transactions have failed because buyers and sellers hit an impasse over price, he added.

Market analysts are expecting pricing slowing even more, and land prices in the range of 3 to 5 per cent over the next year.

CBRE’s Song stated that the present price hikes will continue to stop buyers. She noted that, with the increased supply, prices could continue to fall in 2024. However, prices for homes are “unlikely to be significantly redressed because of the robust balance sheets and a low un-sold inventory”.

Tay stated that the launch price is expected to be “elevated” due to construction and land costs already in place.

PropNex’s Gafoor believes developers will price units “more sensibly” in an effort to increase sales at the weekend of launch.

Tay noted that those seeking capital preservation, appreciation, and recurring income, both local and foreign, will likely stay away “until the interest rates reach their peak and stabilise, or even decrease, and until they have more clarity about the economic outlook”.

“Nonetheless the past has demonstrated that investors with experience in Singapore’s private residential market are quick to react when windows of calm turn into the resumption of transactional activity,” he said.


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