SINGAPORE – The Urban Redevelopment Authority (URA) released its latest real estate statistics for the first quarter of 2023 on Friday (28 Apr), revealing a notable increase in private residential property prices and rentals.

Prices of private residential properties rose by 3.3%, while rentals increased by 7.2%. Landed property prices experienced a significant jump of 5.9%, compared to the 0.6% increase in the previous quarter.

The Core Central Region (CCR) and the Rest of Central Region (RCR) saw increased prices for non-landed properties, with CCR registering a 0.8% increase and RCR a 4.4% increase. The Outside Central Region (OCR) rebounded with a 1.9% increase, following a 2.6% decrease in the previous quarter.

Rental growth for non-landed properties moderated to 6.2%, down from 7.5% in the previous quarter. Landed property rentals, on the other hand, surged by 14.5%, a stark contrast to the 6.3% increase in the previous quarter.

Developers launched 1,312 uncompleted private residential units for sale, marking a significant increase from the 504 units in the previous quarter. Sales also improved, with 1,256 private residential units sold, compared to 690 units in the previous quarter.

Resale transactions dipped slightly to 2,622 units in the first quarter of 2023, compared to 2,694 units in the previous quarter. Sub-sale transactions increased from 204 units in the previous quarter to 243 units in the first quarter of 2023.

The supply of completed private residential units (including ECs) rose by around 60% in the first quarter of 2023, with 3,785 units completed compared to 4,423 units in the previous quarter. Approximately 44,846 uncompleted private residential units are in the pipeline with planning approvals, a slight decrease from the 46,041 units in the previous quarter.

The vacancy rate for completed private residential units increased to 6.0%, up from 5.5% in the previous quarter. The government has ramped up private housing supply on the Confirmed List for the GLS Programme to 4,090 units in the 1st half of 2023 from 3,505 units in the 2nd half of 2022 to cater to demand.

The office market remained stable, with prices unchanged and rentals increasing by 5.1%. The retail market saw a decrease in prices by 0.9% and a decrease in rentals by 0.3%.

Sharing his perspective on the latest URA release of statistics, Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru, said that the 3.3% increase in private residential property prices in Q1 2023 marks the twelfth consecutive quarter of price growth, despite challenges such as high-interest rates, uncertain economic outlook, and tighter property curbs.

He noted that factors contributing to the rise in private home prices include sustained growth in the OCR due to new launches, and modest price increases in the RCR and CCR for non-landed properties, driven by investors seeking safe havens to park their wealth.

Dr Tan believes that the recently doubled Additional Buyer’s Stamp Duty (ABSD) rates for foreigners may cause some investors to reconsider their positions, potentially slowing sales and conversions in Q2 2023 for smaller units and the CCR. However, the replenishment of supply remains slow, and robust demand from HDB upgraders should keep prices buoyant.

Furthermore, interest rates are expected to peak in H2 2023 but not return to pre-pandemic levels, maintaining high financing costs for property purchases. Dr Tan suggests that buyers should consider the ABSD as part of the transaction cost and factor it into their purchases, just as they do with Buyer’s Stamp Duty (BSD).

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