The fourth quarter of 2023 was marked by an increase of 2.7 percent increase in the price of residential properties that is used for private use in Singapore predominantly due to sales of new launches that were priced in line with benchmark prices, as well as the low quantity of transactions.
A rise in Q4 prices has pushed the price index higher from 0.8% to 0.8 percent increase in the third quarter to an 6.7 percent increase by the final quarter of the year. This is a tiny decline from an 8.6 percent rise in 2022 and an increase of 10.6% increase in 2021.
Tan Tee Khoon, the PropertyGuru Singapore Country Manager is Tan Tee Khoon. He says that the price fluctuations between 2023-2024 indicate that the price of houses that are used by private people has reached its highest point.
Tricia Song is CBRE’s head of research for Singapore as well as South-east Asia. Tricia Song, CBRE’s head of research for Singapore as well as South-east Asia said prices for homes sold by private homeowners have increased over the past seven years, a streak that began when the low reached in mid-2017.
According to Song that the price increases within the Outside Central Region (OCR) were considerably greater than those in the Rest of Central Region (RCR), which saw an increase of 2.7 percent rise. The most important Core Central Region (CCR) prices also rose by 2.1 percent.
Private condo prices in OCR were up 4.6 percent over the course of a quarter (qoq) following a 5.5 percent rise in the previous quarter. CCR prices were up by a fraction, of 4.2 percent, during the fourth quarter but rebounding from the prior quarter’s decline of 2.7 per cent.
Two launches in particular racked up impressive sales when they were launched during the fourth quarter at benchmark prices. CapitaLand’s J’Den located in Jurong East, sold 323 units at an average cost of S$2,451 a square foot (psf) at the time it was launched. UOL’s Watten House in Bukit Timah and SingLand Watten House, located in Bukittimah, each sold 100 units at the average price of $3,230 per square. foot.
According to Cushman and Wakefield research chief Wong Xian Yang, the two projects accounted for around half of all new sales that were generated in the OCR and CCR segments in the fourth quarter.
RCR prices fell by 1.2 percent during Q4 following the increase of 2.1 percent during the previous quarter. Certain projects that are in development could have sold their last un-sold units for sale and this has led to a decline in the RCR index, explained Song. It is the case for Liv @ MB at Mountbatten and Myra at Potong Pasir. The One Pearl Bank Condo in Outram is also sold out.
Analysts said that a lower volume of sales over the course of the year, and in the fourth quarter, and slower price increases outside OCR, show an increasing customer resistance to price increases.
Wong, an analyst with Cushman & Wakefield analyst, said that prices for non-landed goods are at historic levels. This will continue until the end of Q4 2023. “Compared with pre-pandemic levels (at the close of Q4 2019), CCR, RCR and OCR prices for non-landed goods are increasing by 11 percent or 37 percent, and 40 percent according to the respective data,” he said.
Knight Frank’s head of research Leonard Tay stated that despite the fact that financial statements are in good shape, buyers have been and will remain prudent when it comes to their choices for homes.
Lee Sze Teck – Huttons’ chief of data analysis and analysis – explained that the record sales for Q4’s launch indicated “ample capacities” for local buyers, even though foreign buyers were not able to purchase due to the rise in Additional Buyers Stamp Duty (ABSD), which was implemented in April of this year.
In the 4th quarter of 2009, Singaporeans as permanent residents, Singaporeans and foreigners made up 98.5 percent of the homeowners who purchased homes privately.
Based on caveats data from January. 2nd, 2024, the amount of foreign purchases during the quarter of 2023’s fourth quarter fell from 271 in Q12020 and 62 for Q4 2023. Lee stated that this is the lowest figure since December 2011, the time that ABSD was first implemented. The government introduced ABSD for the first time in its history.
The number of transactions decreased throughout the year. According to the most recent data from the Urban Redevelopment Authority on Tuesday 2 January, the total amount of transactions for private residences was down 27 percent from the Q3 numbers. This is equivalent to 3,800 units.
The total amount of units sold during the year totalled 18,510 units, which is a decrease by 15% compared to 21,890 in 2022. This is the smallest annual sale since 2016 as reported by URA. The total includes newly sold units, resales and subsales. The figures do not include executive condos.
Properties that were landed saw an increase in sales during the fourth quarter of this year. In Q4 the cost of homes that were landed rose by 4.5 percent and then reversed the decrease of 3.6 percent from the previous quarter. For the whole of 2023, the costs of homes landed were increasing by 7.8 percent in comparison to 9.6 percent in 2022.
According to Knight Frank Tay, the demand for freehold land is “evergreen”. “The main issue to ensure that deals are concluded successfully is a lack of stock readily available.”
Ismail Gafoor, the CEO of PropNex Realty, is Ismail Gafoor. He said that the tiniest increase in sales of detached homes could be the cause of the 4.5 percent increase. There were 43 detached houses during the fourth quarter of 2018, which was in contrast to 39 units in the previous quarter. The cost of a detached property increased by 16 percent from QoQ to S$1,714 per square foot of land. He suggested that this could have helped offset the lower price of semi detached homes as well as terraced homes.
The homeowners who are landed are likely to have higher prices, and they show no urgency to sell, said the chief executive officer of ERA Marcus Chu. Many more landed transactions have been canceled because sellers and buyers reach an impasse over price and price, he said.
Analysts anticipate prices to continue to slow, and be between 3 and 5 percent in the next few years.
CBRE’s Song declared that the current price increases will continue to deter buyers. The CBRE analyst said that because of the rising stock, prices are expected to slow in 2024. Prices for houses “are likely to remain in a downward trend due to the strength of household balance sheets as well as the low amount of inventory that isn’t sold”.
According to Tay the launch pricing will remain “higher” due to land and construction costs already committed.
PropNex’s Gafoor believes that developers should set prices “more effectively” to boost sales during the launch weekend.
Tay said that investors looking to preserve capital and appreciation, along with regular income, will likely stay on the sidelines until the interest rates hit their highest, stabilize, and perhaps reduce, once there is greater clarity about the economic outlook.
The Landmark is one of the best selling projects in the city due to it’s attractive price comparing to the current CCR prices.
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