Private home prices up 2.7% in Q4, taking full-year rise to 6.7%

The fourth quarter of 2023 witnessed an increase of 2.7 percent increase in the price of residential property to be used for private purposes in Singapore mostly due to the launch of new launches that were priced with benchmark prices, as well as the low volume of transactions.

The Q4 surge boosted the price index from to an 0.8 per cent increase in Q3 to close the year with a 6.7 percent increase, which is slightly lower than the 8.6 percent increase that occurred in 2022 and an 10.6 per cent rise in 2021.

Tan Tee Khoon, the PropertyGuru Singapore Country Manager is Tan Tee Khoon. He pointed out that the changes in prices between 2023-2024 suggests that the value of homes that are used for private purposes is at its highest.

Tricia Song is CBRE’s head of research for Singapore as well as South-east Asia. She said that the price of homes for purchase by private homeowners has increased for seven consecutive years following the bottom which was achieved in the mid-year mark of 2017. She noted that prices are up 32,3 per cent from the low of Q1 2020.

Based on Song, the price increases within the Outside Central Region (OCR) were considerably more than the Rest of Central Region (RCR) that saw a 2.7 percent increase. The primary Core Central Region (CCR) prices also increased by 2.1 percent.

Private condo prices in OCR increased by 4.6 percent in the quarter-on-quarter (qoq) after a 5.5 percent rise in the previous quarter. CCR prices rose by a fraction in the fourth quarter, which was 4.2 per cent during the fourth quarter, however improving from the decrease in the previous quarter of 2.7 percent.

At the time they launched two launches in particular had remarkable numbers. CapitaLand’s J’Den in Jurong East sold 323 units, which equates to an average of S$2,451 for each square foot. UOL’s Watten House in Bukit Timah and SingLand Watten House, located in Bukittimah both sold 100 units at an average price of S$3,230 a square foot. foot.

The two projects generated approximately half of all new sales generated within the OCR and CCR segments during Q4of the year, as stated by Cushman and Wakefield’s research chief Wong Xian Yang.

RCR prices dropped by 1.2 percent in the fourth quarter after soaring by 2.1 per cent in the previous quarter. One Pearl Bank Condo located in Outram is also sold out.

A smaller volume of sales in the fourth quarter, and all through the year, and slower price increases beyond the OCR reveal a growing consumer resistance to already high prices analysts claimed.

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Wong who is a Cushman & Wakefield analyst, stated that the prices of non-landed products are at historical highs. This will last until Q4 2023.

Knight Frank’s head of research Leonard Tay stated that despite the fact that household balance sheets are in good shape buyers have been and will remain prudent when it comes to their choices for homes.

However, Lee Sze Teck, Huttons chief of data analytics and analyses, explained that the record-breaking sales of the Q4 launch were evidence of the “ample capability to local buyers” even as foreign buyers had not been buying due to the rise in the Additional Buyer’s Stamp Duty (ABSD) last April.

In Q4, Singaporeans as permanent residents, Singaporeans and foreigners made up 98.5 percent of homeowners who bought homes privately.

Based on caveats information as of Jan. 2nd, 2024 the quantity of purchases made by foreigners in Q4 2023 decreased from 271 in Q12020 and 62 for Q4 2023. Lee stated that this is the lowest amount since December 2011, the time that ABSD was first launched. The government launched ABSD for the first time in its history.

According to the most recent figures released by the Urban Redevelopment Authority, the total value of private home sales was 27 percent less than in Q3. This is equivalent to 3800 units.

The number of units sold during the past year were 18,510, which is down 15% from 21 890 units in 2022. This figure does not include executive condos.

Landed properties had record-setting sales in the final quarter of the year. In Q4 the cost of homes which were landed grew by 4.5 percent, and reversed the decline of 3.6 percent during the preceding quarter. For the entire year 2023, the cost of houses that were being landed increased by 7.8 percent which is up from 9.6 percent in 2022.

Demand for freehold-landed homes is “evergreen” According to Knight Frank’s Tay and “the principal obstacle to ensuring that deals are successfully completed is the absence of inventory”.

Ismail Gafoor is the chief executive director of PropNex Realty. He said that the 4.5 percent price hike could be due to the slight increase in detached house transactions. There were 43 detached houses during the fourth quarter of 2018, which was compared to 39 units in the previous quarter. The cost of a detached house also rose by about 16 percent in QoQ, to S$1,714 per square foot of land. The economist said this could have helped offset the lower price of semi detached houses and terraced homes.

Homeowners who have landed are likely to have higher prices, and do not have the urgency to sell, according to the chief executive officer of ERA Marcus Chu. More landed deals were canceled as buyers and sellers reach an impasse over price and price, he said.

Analysts anticipate that prices will continue to decline, between 3 to 5 percent annually.

CBRE’s Song declared that the price hikes currently in place will continue to deter the demand. The CBRE analyst believes that due to the rising inventory, prices will continue to decline until 2024. Prices for houses “are likely to continue to fall due to the strength of the household balance sheets as well as the low amount of inventory that’s not sold”.

The new pricing plan for the launch is expected to remain “elevated”, due to the committed cost of construction and land, according to Tay.

PropNex’s Gafoor is of the view that developers should establish prices “more efficiently” to increase sales during the launch weekend.

Tay pointed out that those interested in capital preservation and appreciation, as well as regular income, will remain on the sidelines until the interest rates hit their highest or stabilize and possibly decrease, as well as there is more clarity on the future of the economy.


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