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

Private home prices saw a slight rebound in the third quarter of 2023, increasing by 0.5% q-o-q according to flash estimates released by the URA. This marks an increase from the 0.2% decrease in the previous quarter following cooling measures announced in April, which had marked the first decline in the last 12 consecutive quarters of growth.

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Nonetheless, the growth in 3Q2023 is significantly lower than the average price increase of 2.1% recorded in 2022. Ismail Gafoor, CEO of PropNex Realty, attributed this to a heightened sense of caution amongst developers, buyers and sellers, combined with a watch-and-wait approach for potential buyers due to the greater number of new homes available in the last few months. Activity was further curbed by the lunar seventh month.

Private residential sale transactions fell by 15% q-o-q to 4,569 transactions in 3Q2023. Non-landed properties saw the greatest increase with prices rising 2.1% q-o-q, providing the main impetus for price growth. The Outside Central Region (OCR) saw the greatest increase with 5.1% q-o-q growth, followed by the Rest of Central Region (RCR) with 2.3% q-o-q.

In contrast, prices in the Core Central Region (CCR) decreased by 2.6% q-o-q, extending the 0.1% decline in the previous quarter. This was a result of prohibitive additional buyer’s stamp duty rates for investors and foreigners, coupled with a dampening of market sentiment due to a high-profile money-laundering investigation.

The landed private property market also moderated in 3Q2023, with prices sliding 4.9% q-o-q, breaking an eight-quarter streak of growth. This was attributed to the lack of supply, as demand for landed homes remain high amongst locals.

Looking ahead, Cushman & Wakefield maintain its full-year price growth forecast of 2% to 5% for private residential properties in 2023. Chia Siew Chuin, head of residential research, research and consultancy at JLL, believes local demand for private housing will remain healthy and supported by the potential launches of several new projects in October and November. She also suggests buyers will continue to be price-sensitive due to the weaker economic environment and higher interest rates.