Private home prices edge up 0.5% q-o-q in 3Q2023: URA flash estimates

Private home prices increased by 0.5% in the third quarter of 2023 (3Q2023), according to flash estimates released by the Urban Redevelopment Authority (URA) on Oct 2. This growth comes off the back of the 0.2% decline recorded in the second quarter (2Q2023), when cooling measures were first announced.

However, even with this slight rebound, growth momentum has slowed significantly, with the 3Q2023 increase well below the average quarterly price increase of 2.1% recorded in 2022. Ismail Gafoor, CEO of PropNex Realty, points to a heightened sense of caution among developers, buyers and sellers, as well as buyers’ watch-and-wait approach, due to the large supply of new homes on the market. Activity was further softened in August and September due to the lunar seventh month.

Private residential sale transaction volume plummeted 15% quarter-on-quarter (q-o-q) to 4,569 transactions in 3Q2023, which is also 26% lower year-on-year. Non-landed properties experienced the highest growth, 2.1% q-o-q, demonstrating a rebound from the 0.6% decrease in the previous quarter. Prices in the Outside Central Region (OCR) saw the greatest increase of 5.1% q-o-q, followed by the Rest of Central Region (RCR) at 2.3%.

In contrast, prices in the Core Central Region (CCR) fell 2.6% q-o-q, with high additional buyer’s stamp duty rates for investors and foreigners coupled with a recent money-laundering investigation likely taking its toll on market sentiment in this segment.

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Landed private property market also recorded a 4.9% q-o-q decline, reversing the 1.1% increase registered in 2Q2023 – putting an end to the eight-quarter streak of landed housing price growth. Despite this, Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield, does not anticipate a sustained downward trend for landed homes, as they remain in short supply.

Despite interest rates and cooling measures, Wong believes the private residential market continues to demonstrate resilience. Supported by low unemployment rates and resale HDB prices, as well as the potential launches of several new projects in October and November, Chia Siew Chuin, head of residential research, research and consultancy at JLL, concurs that local demand for private housing should remain healthy.

Looking ahead, both researchers expect private home prices to be relatively stable over the next few quarters, with Cushman & Wakefield maintaining its full-year price growth forecast of 2% to 5% for private residential properties in 2023. Year-to-date, landed home prices are up 1.8%.