Private home prices in Singapore increased by 3.2 per cent in the first quarter of 2023, according to official flash estimates released by the Urban Redevelopment Authority (URA). This is compared to the 0.4 per cent increase in the previous quarter. The first quarter private residential property index increased to 194.6 points, up by 6.0 points. However, sales fell by about 8 per cent on a quarter-on-quarter basis and by about 38 per cent on a year-on-year basis.
“The slower sales indicate that declining affordability has taken a toll on some potential buyers who face the dual challenges of skyrocketing interest rates and continued price growth,” said Christine Sun, OrangeTee & Tie's Senior Vice President of Research and analytics.
Prices of non-landed private residential properties in the Core Central Region (CCR) increased by 1 per cent, compared to the 0.7 per cent increase in the previous quarter. Prices in the Rest of Central Region (RCR) increased by 4 per cent, compared to the 3.1 per cent increase.
As for the Outside Central Region (OCR), prices increased by 1.9 per cent, compared to the 2.6 decrease in the previous quarter. Huttons Asia's Senior Director for research Lee Sze Teck attributed the rise in private home prices to more property launches and the return of buyers after the seasonal lull at the end of 2022.
"The marginal increase in property tax in February 2023 did not have an impact on market demand as buyers chased after attractively priced homes in the market," he said. Sun added that more private homes will be launched in prime locations and city fringe areas in the coming months and as a result, transactions involving such pricier homes may move up the overall price index further.
Around 40 projects are slated for launch in 2023, according to ERA Realty’s key executive officer Eugene Lim. He said, “Private property prices in 2023 are unlikely to see any price correction as developers continue to factor in the higher land, construction, financing and labour costs incurred. Nonetheless, given the more competitive environment this year, product differentiation and competitive pricing will be key for any developer to lock in sales.”
The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up until mid-March. URA will release its full set of real estate statistics for the first quarter of 2023 on Apr 28.
