Due to strong demand for private homes and escalating property prices, the government introduced another round of cooling measures in April 2023. The increased Additional Buyer’s Stamp Duty (ABSD) rates were effective and slowed down demand and transaction volumes for private residential properties.
However, prices for new launch condos are likely to hold steady. Buyers have demonstrated that they are willing to pay a premium for new homes and to meet the new benchmark prices for projects or integrated developments with easy access to amenities, transportation networks, and schools.
The rental market has also started to cool and median asking rents are slowly decreasing. Local demand has dwindled as more properties are completed while expat demand has been insufficient to bridge this gap and keep rental prices buoyant. As more private residential projects reach completion, the additional supply will likely push rental prices downwards – a trend we expect to carry on into 2024.
Contents
- Get the GuruView
- Singapore Property Sale Market Index Q3 2023
- Sale Price Index, Supply Index and Demand Index
- Top Performing Districts and Projects
- Singapore Property Rental Market Index
- Rental Price Index, Supply Index and Demand Index
- Top Performing Districts by Rental Yield
- Conclusion
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Get the Guru View: Key Findings of the Singapore Property Market Report Q3 2023
Singapore Property Sale Market Index Q3 2023
The Singapore Property Sale Price Index reveals that the median asking prices of listings on the PropertyGuru website rose 1.0% from Q1 2023 to Q2 2023, following a 0.7% increase from Q4 2022 to Q1 2023. Sellers are still holding firm or raising their asking prices in the current high-price, high-interest-rate environment.
Demand remains fairly strong and the pricing expectation gap continues to be a significant barrier to transaction. But more sellers are willing to accept a lower price to complete the sale of their property in Q2 2023, especially if they needed to do so to avoid incurring the higher ABSD rates. This contrast between asking and transacted prices suggests we could see prices oscillate between slight increases and decreases in subsequent quarters.
Asking prices for HDB resale flat listings slowed in Q2 2023, seeing a 0.6% quarter-on-quarter (QoQ) growth, as compared to a 1.6% QoQ increase in Q1 2023. Meanwhile, demand has declined 6.4% QoQ. These numbers suggest that the Government’s efforts to promote market stability via introducing cooling measures and increasing BTO flat supply have been successful.
Likewise, overall asking prices for private property show a trend of slowing down. Notably, there is an increased supply of private housing in the 2H2023 GLS programme‘s Confirmed List offering 5,160 units, up from 4,090 units in the 1H2023 GLS programme. In 2024, buyers are likely to have more options, especially for non-landed private property.
Top Performing Districts and Projects
Some new launches for Q3 2023 that are yet to be launched to look out for:
- J’den (District 22)
- TMW Maxwell (District 1)
- Altura (District 23)
The April 2023 property cooling measures saw a marked reduction in foreign interest for private properties. Despite this, domestic demand, driven by Singaporean Citizens and PRs, remained robust. Standout projects included those integrated developments situated near or connected to MRT stations.
Moreover, a new trend has emerged: buyers are willing to fork out more for new condo launches, indicating a strong desire for new homes even at higher price points. It is worth noting that the median price PSF for any new launch is now likely to begin from $2,000, regardless of location.
The number of million-dollar flats sold this quarter was comparable to the first, suggesting that the market for such high-priced flats is relatively stable. Still, it’s important to note that million-dollar flat transactions make up a small portion of all HDB resale flat transactions (1.7% of all transactions in Q2 2023).
Singapore Property Rental Market Index Q2 2023
The rental market in Singapore has started showing symptoms of slowing down, with the Singapore Property Rental Price Index falling by 2.9% QoQ. This is the first recorded decline since 2018.
With the completion of more condo units and BTO flats, demand has softened and supply has increased. Demand is likely to fluctuate as firms continue to chart their manpower plans according to the shifting economic outlook.
Although landlords are likely to keep asking rents high, economic conditions could exert more downward pressure on these prices. Additionally, as mortgage interest rates stabilise and begin to move sideways, landlords may also feel less of a need to raise rents. However, the pace of rent easing is likely to be gradual.
Top Performing Districts by Rental Yield
Areas with lower prices continued to experience higher rental yields, with four of the five top-performing districts by rental yields being located further away from the Central Business District (CBD). These areas remain attractive to tenants, given the relatively lower rents. Separately, District 1 home prices were more stable compared to prices in the other districts.
HDB flats in mature estates, such as Bukit Timah and Ang Mo Kio, have a higher rental yield as the rents rose faster than prices, especially for the older flats. Separately, the more affordable flats areas such as Yishun and Jurong enjoyed a higher yield as rental demand starts to shift to flats further from the city centre.
Conclusion
The Singapore residential property market is demonstrating symptoms of deceleration as high interest rates and cooling measures strain prices and demand. On another front, the rental market is also showing signs of moderation, due to the increased supply.
Contrastingly, new major condo launches consistently command higher prices. Integrated developments and those conveniently located near employment centres and amenities are particularly attractive to potential buyers.
For more insights and analysis, read the full PropertyGuru Singapore Property Market Report Q3 2023:
Or read past Property Market Reports
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