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Private home prices inch up 0.4% in 4Q2022 amid caution from buyers and developers

For the whole of 2022, RCR prices increased 9.7% y-o-y while OCR prices climbed 9.3% y-o-y. (Pictured, view towards Thomson and Balestier by Samuel Isaac Chua/The Edge Singapore)

SINGAPORE (EDGEPROP) - Prices of private residential properties increased by 0.4% q-o-q in 4Q2022. This was a slightly better performance than the 0.2% q-o-q increase indicated in the flash estimates released by URA on Jan 3. However, it is still a significant fall compared to the 3.8% q-o-q increase that was recorded in 3Q2022.

For the whole of 2022, prices of private residential properties climbed by 8.6%, moderating from the 10.6% price increase in 2021.

Non-landed price growth last quarter was led by sales in the Rest of Central Region (RCR) which recorded a price increase of 3.1% q-o-q, continuing a strong performance of 2.8% q-o-q increase in 2Q2022.

According to Tricia Song, head of research, Southeast Asia, at CBRE, the uptick was led by high pricing at existing projects Riviere and One Pearl Bank, which were also among the top 10 best-selling projects in 2022.

Other projects on that list include Lentor Modern in the Outside Central Region (OCR), which had a median price of $2,108 psf in 2022; Normanton Park in the RCR with a median price of $1,865 psf; and Amo Residence in the OCR with a median price of $2,110 psf.

Riviere by Frasers Property Singapore is about 90% sold, close to 3½ years after its sales launch. (Picture: Samuel Isaac Chua/The Edge Singapore)

OCR prices came off an exceptionally high base and thus recorded a 2.6% q-o-q decline in 4Q2022, down from a 7.5% q-o-q hike in the previous quarter. For the whole of 2022, RCR prices increased 9.7% y-o-y while OCR prices climbed 9.3% y-o-y, based on research by CBRE.

In addition to the lack of new launches in the OCR to help propel prices upwards, rising interest rates and more stringent borrowing requirements were contributing factors, says Nicholas Mak, head of research and consultancy at ERA Realty.

“Most of the buyers of OCR private housing, such as HDB upgraders, usually are more price-sensitive and have limited cash budgets for their home purchases. As a result, the private housing demand from this group of buyers would be more affected by the September 2022 cooling measures combined with higher interest rates,” he adds.

Subdued new launch market

In terms of transaction volume, last quarter sales amounted to a relatively subdued 690 units in the new launch market, while 2,898 units changed hands in the secondary market. For FY2022, there were 7099 new sales and 14,791 resales and sub-sales.

This comes up to 21,890 transactions and is a 34.8% decrease compared to the 33,557 units sold in 2021. According to Leonard Tay, head of research at Knight Frank Singapore, this was not due to a lack of home buyer demand, but the lack of saleable inventory on the market.

He adds: “The handful of notable new launches in 4Q2022, the looming global recession and high interest rate environment also contributed to transaction activities slowing down towards the year-end, as the lack of listings compelled home buyers to adopt a watch-and-wait posture until more units become available.”

Developers exercised caution and only launched 504 units for sale in 4Q202, acording to CBRE's Song. Last quarter, new projects that were launched for the first time were Kovan Jewel (34 units), Enchante (25 units), Hill House (72 units), and Sophia Regency (38 units).

“The take-up rate was mostly lukewarm at these new launches, as home buying sentiment in Q42022 was dented by the worsening macroeconomic backdrop and high mortgage rates,” she says.

Read also: Home buyers’ sentiments remain positive despite latest cooling measures

Few landed home sellers

Prices in the landed homes market rose 0.6% q-o-q last quarter, bringing the total price growth for 2022 to 9.6%.

“Prices of landed homes continued to rise, only held back by sellers’ reluctance to place their homes on the market,” says Knight Frank’s Tay. “Even though buyers are willing to offer decent price premiums to incentivise landed homeowners to sell, most were decidedly averse, with some deterred by the 15-month wait-out for downgraders looking to purchase HDB flats.”

This refers to the latest property cooling measures rolled out on Sept 30 last year, which affects  private property owners looking to purchase a resale four- or five-room HDB flat by imposing a 15-month wait-out period after they sell their private property. (Find HDB flats for rent or sale with our Singapore HDB directory)

Buffet spread of 2023 new launches

While the overall buoyancy of the property market in 2022 was weighed down by a significant lack of new launches, this year will see a bumper crop of new ready-to-launch projects hit the market. More than 40 new projects are expected to be launch-ready this year.

“The new launches in 2023 will bring some relief to the undersupply situation and provide home buyers with more product choices in a buffet spread of locations,” says Tay.

But he also cautions that the expected rebound in sales volume comes at a time of economic uncertainty, employee layoffs in the technology sector, continued rising interest rates as well as the increased cost of consumption.

Don't miss out to check out the hottest new launch condo and new landed property in Singapore

The crowd at Sceneca Residence on the first day of preview (Photo: MCC Singapore)

Nevertheless, key fundamentals continue to drive the local private residential market, says Chia Siew Chuin, head of residential research, research and consultancy at JLL Singapore. “Healthy household liquidity, a relatively tight employment market, as well as the attractiveness of Singapore as a haven for investments for foreigners are expected to continue driving home buying demand,” she notes.

She adds that the anticipated return of buyers from mainland China is also expected to bolster buying demand here.

The first new launch of this year, the 268-unit Sceneca Residence at Tanah Merah Kechil Link, achieved a strong sales result, moving 60% of its available units. “This strong result should dispel doubts about the strength of the market and set the tone for the upcoming launches in February and March,” says Lee Sze Teck, senior director, research, at Huttons Asia.

Over the next two months, new launch-ready projects include Blossoms by the Park, Lentor Hill Residences, Newport Residences, Tembusu Grand, Terra Hill, The Botany at Dairy Farm, The Continuum, The Hill@One-North, and The Reserve Residences.

Check out the latest listings near Riviere, One Pearl Bank, Lentor Modern, Normanton Park, Amo Residence, Enchante, Hill House, Sceneca Residence, Blossoms by the Park, Lentor Hills Residences, Newport Residences, Tembusu Grand, Terra Hill, The Botany at Dairy Farm, The Continuum

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