Private Residential Property Prices Edge Up 0.5% QoQ in Q3 2023

Private residential property prices rose by 0.5% quarter-on-quarter (q-o-q) in 3Q2023. This increase reflects a slight rebound from the 0.2% decline in 2Q2023. That dip, induced by the cooling measures announced in April, marked the first contraction in private home prices after 12 consecutive quarters of growth.

Nonetheless, price growth in 3Q2023 remained significantly lower than the average quarterly increase of 2.1% recorded in 2022. The momentum of private home price growth has moderated substantially in recent quarters. This indicates that developers, buyers, and sellers are adopting a wait-and-see stance as they assess market data to gauge the impact of cooling measures on housing demand, with buyers also taking their time amid an expanding supply of new homes.

Market activity was also quieter in August and September due to the Hungry Ghost Festival (Seventh Lunar Month). Total private home sales transaction volume fell 15% q-o-q to 4,569 units in 3Q2023, representing a 26% year-on-year decline.

Private residential price growth was supported by non-landed private home prices, which rose 2.1% q-o-q in 3Q2023, rebounding from a 0.6% decline in the previous quarter.

Homes in the Outside Central Region (OCR) led the price gains with a 5.1% q-o-q increase, followed by the Rest of Central Region (RCR), where prices climbed 2.3% q-o-q.

Price growth in the OCR and RCR was largely driven by new project launches, such as the 598-unit Lentor Hills Residences, the 408-unit The Myst, and the 306-unit The LakeGarden Residences in the OCR; alongside the 1,008-unit Grand Dunman and the 520-unit Pinetree Hill in the RCR.

In contrast, non-landed private home prices in the Core Central Region (CCR) fell by 2.6% q-o-q, extending the 0.1% decline seen in the preceding quarter.

This market segment continues to be weighed down by hefty Additional Buyer's Stamp Duty (ABSD) rates on investors and foreigners, while recent high-profile money laundering probes have further dampened buyer sentiment.

The landed private residential segment also softened in 3Q2023, with prices slipping 4.9% q-o-q, reversing the 1.1% gain in 2Q2023.

This decline snapped an eight-quarter streak of price increases for landed homes. Nevertheless, landed property prices are not expected to see a prolonged slump, as landed housing supply remains tight and continues to be highly sought after by local buyers.

Year-to-date, landed home prices have appreciated by 1.8%.

Looking ahead, the private residential market remains resilient despite elevated interest rates and property cooling measures. Unemployment remains low, and rising HDB resale prices continue to bolster upgrader demand for private property.

Local demand for private housing is expected to stay healthy. In October and November, transaction volumes should be underpinned by several upcoming launches, such as Watten House, The Hill @ one-north, Hillock Green at Lentor Central, and J'Den (the redevelopment of JCube in Jurong).

Nevertheless, with 19 projects already launched in 2023, pent-up demand has largely been absorbed, and buyers are expected to remain price-sensitive amid a weaker economic environment and higher interest rates.