The Urban Redevelopment Authority (URA) has released its flash estimate of the private residential property price index for the first quarter of 2023, revealing an increase of 3.2% compared to the previous quarter, marking the fourth consecutive quarter of price increases.
Despite the rise in prices, the sale transaction volume fell by about 8% on a quarter-on-quarter basis and by about 38% on a year-on-year basis in 1st Quarter 2023.
Dr Tan Tee Khoon, PropertyGuru’s Country Manager for Singapore, commented on the reasons behind the rise in private home prices, stating that sustained price growth in the Outside Central Region (OCR) due to new condominium launches has contributed to the price increases. The prices in the OCR recovered this quarter after observing a 2.6% drop in Q4 2022, largely due to the major Q1 2023 condo launches such as Sceneca Residences and The Botany at Dairy Farm.
Based on the caveats lodged on URA (as of 31 March 2023), The Botany at Dairy Farm sold the most units among non-landed private residential projects, selling 182 units, followed by Sceneca Residences, which sold 159 units, and Terra Hill, which sold 97 units.
Dr Tan further notes that uncertainty in equity markets has caused an increase in motivation among investors to reroute funds from buying stocks to real estate, with recent new launches being opportune, attractive options.
According to the URA, prices of non-landed private residential properties in the Core Central Region (CCR) increased by 1.0% from the previous quarter, while prices in the Rest of Central Region (RCR) increased by 4.0%. Prices in the Outside Central Region (OCR) increased by 1.9%, recovering from a 2.6% drop in Q4 2022.
Despite the increase in private residential property prices, the revised Buyer’s Stamp Duty (BSD) rates announced during the Budget 2023 statement are unlikely to have a significant impact on luxury property buyers.
Dr Tan notes that these changes will unlikely change buyers’ decisions, as the increased BSD amount is small compared to the overall price of the properties themselves.
Looking forward, some new private residential property launches to anticipate in Q2 2023 include Blossoms by the Park, Tembusu Grand, and Lentor Hills Residences.
While private residential property prices are unlikely to drop in the near term, Dr Tan said slower sales suggest that prices are likely to stabilize in the coming months amid global economic uncertainty.