2-1-2024 (SINGAPORE) Private home prices in Singapore experienced a slower pace of growth for the second consecutive year in 2023, with an increase of 6.7 percent compared to 8.6 percent in 2022 and 10.6 percent in 2021.
According to flash estimates released on Tuesday (Jan 2) by the Urban Redevelopment Authority (URA), private home prices rose by 2.7 percent in the final quarter of 2023, faster than the 0.8 percent recorded in the third quarter. This growth was primarily driven by sales at newly launched projects towards the end of the year.
Lee Sze Teck, senior director of data analytics at Huttons, highlighted the “robust sales” of three major non-landed launches in November: Hillock Green, J’den, and Watten House. He noted that the strong sales were an indication of ample liquidity among local buyers, with foreigners opting out following the increase in Additional Buyer’s Stamp Duty (ABSD) to 60 percent in April 2023. Singaporeans and permanent residents accounted for 98.5 percent of purchases in the fourth quarter, while foreigners made up only 1.5 percent.
The ABSD was doubled for foreigners and increased for Singaporeans and permanent residents purchasing multiple properties as part of cooling measures introduced in April. It marked the third round of cooling measures since December 2021.
Marcus Chu, CEO of ERA Singapore, acknowledged that the ABSD hike in April posed a challenge for the residential sector in 2023. However, he noted that the market may have found its footing with the gradual return of local buyers in the fourth quarter.
Christine Sun, senior vice president of research and analytics at OrangeTee and Tie, pointed out 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 percent, as well as the suburban areas or outside the central region (OCR) at 4.6 percent. Prices in the rest of the central region (RCR) dipped by 1.2 percent for the quarter. Transaction volume decreased by approximately 27 percent quarter-on-quarter in the fourth quarter, and for the whole of 2023, it fell by about 15 percent compared to 2022.
The Urban Redevelopment Authority (URA) stated that in 2024, there could be up to 38 launches with an estimated 11,590 units, including an executive condominium project. The first quarter alone may see up to 12 launches, featuring Ardor Residence, Hillhaven, Lentoria, The Arcady at Boon Keng, and The Hillshore, set to be launched before the Chinese New Year.
Market analysts anticipate that the property market will remain stable in 2024 due to sustained interest from investors and local homebuyers. Ms. Sun stated that the increased supply of completed condos in 2023 helped stabilize prices significantly, and this trend is expected to continue in 2024. The property market is also expected to benefit from an improving economy and better job prospects, which will drive demand for properties.
Analysts estimate that price growth may continue to moderate in 2024, with prices rising by approximately 3 to 6 percent for the entire year. The URA highlighted that the government has increased housing supply through the government land sales (GLS) program. The increased private housing supply from the GLS program will be ready for sales launch in the coming year or so, catering to purchase demand and helping to keep prices in line with economic fundamentals.
