The fourth quarter of 2023, the price of residential properties for private use in Singapore rose by 2.7 percent. This was due primarily to the sales of new launches at benchmark prices, and the low volume of transactions.

The Q4 spurt raised the price index from to a 0.8 per cent increase in Q3 to end the year with an increase of 6.7 percent increase, which is only a little lower than the 8.6 percent increase that occurred in 2022 and the 10.6 percent rise in 2021.

Tan Tee Khoon, the PropertyGuru Singapore Country Manager is Tan Tee Khoon. He stated that the price changes between 2023-2024 indicate that the value for homes used by private individuals has reached its peak.

Tricia Song, CBRE’s Head of Research for Singapore and South-east Asia, is Tricia Song. Tricia Song, CBRE’s head of research for Singapore as well as South-east Asia noted that the prices of homes bought by private homeowners have risen for seven years in a row since the lowest point was reached in mid-2017.

The bulk of 2023’s increase was due to the non-landed markets in the suburbs which witnessed prices rise 13.8 percent during the entire year, explained Song. The Outside Central Region’s (OCR) price increases were significantly higher than those of the Rest of Central Region’s (RCR) which saw prices increase by 2.7 percent, as did the primary Core Central Region prices (CCR) was higher by 2.1 percent.

Private condo rates in OCR increased by 4.6 percent, quarter-on-quarter (qoq) after an 5.5 percent increase in the third quarter. CCR prices were up by a fraction than 4.2 percent, in the fourth quarter, but improving from the prior quarter’s decline of 2.7 percent.

At the time they launched two launches in particular had amazing numbers. CapitaLand’s J’Den in Jurong East, sold 323 units for an average of S$2,451 for each square foot. UOL and SingLand’s Watten House located in Bukit Timah, both sold 100 units at the average of $3,230 per square. foot.

According to Cushman and Wakefield research chief Wong Xian Yang, the two projects contributed to around half of all new sales made within the OCR and CCR segments respectively during the fourth quarter of 2004.

RCR prices fell by 1.2 percent in Q4 after soaring by 2.1 percent during the prior quarter. One Pearl Bank Condo located in Outram is also sold out.

A decrease in sales during the fourth quarter as well as throughout the year, aswell being slower price increases beyond the OCR show a rising buyer resistance to already high prices, analysts said.

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Wong who is an analyst with Cushman & Wakefield analyst, stated that the prices of non-landed goods are at historic highs. This will last until Q4 2023.

Knight Frank’s director of research Leonard Tay said that although the balance sheets of households were in good shape, buyers “have been and will continue to be cautious” in their housing choices.

Lee Sze Teck – Huttons chief of analysis and data analysis – explained that the record sales for Q4’s launch indicated “ample capacities” for local buyers, even though foreign buyers did not buy because of the increased Additional Buyers Stamp Duty (ABSD), which was introduced in April of last year.

In the 4th quarter of 2009, HTML0 Singaporeans, as permanent residents, and foreigners represented 98.5 percent of those who bought houses privately.

Based on caveats information from Jan. 2nd, 2024, the number of foreign-owned purchases during Q4 2023 dipped from 271 in Q12020 and 62 for the quarter of 2023. Lee stated that this is the lowest figure since December 2011, the time that ABSD was first launched. The government rolled out ABSD for the first time.

The number of transactions decreased all through the year. Based on the most recent figures provided by the Urban Redevelopment Authority on Tuesday 2 January, the total value of transactions for private homes was down 27 percent from the figures for Q3. This is equivalent to 3,800 units.

The total number of units sold in the year amounted to 18,510 units. This is a reduction by 15% compared to 21,890 units in 2022. It is also the smallest annual sale since 2016 according to URA. The figure comprises newly sold units, resales, and subsales. The figures exclude executive condo units.

The final quarter of 2018 witnessed an increase in the value of land-based properties of 4.5 percent. This was in contrast to a decrease of 3.6 percent during the prior quarter. By 2023, the price of homes that are landed will increase by 7.8 percent, which is up from the 9.6 percent increase in 2022.

The demand for freehold land homes is “evergreen” According to Knight Frank’s Tay and “the main issue to ensuring that deals are completed is the absence of supply of available stock”.

Ismail Gafoor, the CEO of PropNex Realty, is Ismail Gafoor. He said that the tiniest rise in detached house sales could be the reason for the 4.5 percent growth. There were 43 detached homes in the fourth quarter of 2018, which was up from 39 in the preceding quarter. The cost of a detached house also was up by around 16 percent from QoQ to S$1,714 for a square meter of land. He said that this could have helped offset the lower price of semi detached houses and terraced houses.

The homeowners who are landed are likely to have more expensive prices and don’t have the desire to sell, according to the chief executive officer of ERA Marcus Chu. A number of landed deals have been cancelled as buyers and sellers reach an impasse over the price, he added.

Analysts anticipate that prices will continue to decline from 3 to 5 percent annually.

CBRE’s Song said that the current price increases are likely to continue to stifle demand. The CBRE analyst stated that due to the growing inventory, prices will continue to fall by 2024. Prices for houses “are likely to continue to fall due to the strength of household balance sheets and the low amount of inventory that’s not being sold”.

New pricing for launch is expected to stay “elevated”, due to the committed construction and land costs as per Tay.

PropNex Gafoor believes that developers need to set their prices “more efficiently” to boost sales during the weekend of launch.

Tay said that investors looking to preserve capital and appreciation, in addition to regular income, are likely to stay off the market until interest rates peak, stabilize, and perhaps reduce, once there is more clarity on the outlook for the economy.

Source: https://www.businesstimes.com.sg/property/private-home-prices-27-q4-taking-full-year-rise-67

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