In 2023, the Singapore residential property market showed signs of further moderation in the demand for private and public housing. Similarly, the red-hot Singapore rental market observed at the start of the year seems to be stabilising.
Residential private property saw a slowdown in sales activity. This was partly in reaction to property cooling measures, sustained high interest rates, and uncertain economic conditions. The HDB resale market showcased similar behaviour: price and transaction volume growth moderation was observed.
Property owners exhibited resilience, however: they did not show a strong sense of urgency to sell their properties. This was reflected in their steady high asking prices.
What does this mean for the Singapore property market and property prices in 2024? Will they drop? What should home-seekers and property investors look out for in the coming 12 months? Read on to find out.
Contents
- What Happened in 2023
- What to Expect in 2024
- New Projects in 2024
- Conclusion
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Singapore Property Market 2023: Summary
In the first six months of 2023, the government made a series of property announcements and introduced new cooling measures. The Budget 2023 statement included a Buyer’s Stamp Duty (BSD) increase.
Shortly after in April 2023, property cooling measures comprising Additional Buyer’s Stamp Duty (ABSD) hikes were announced. These changes affected foreign buyers and investors most drastically: their ABSD rates were raised to up to 60%. Following this, the number of Core Central Region (CCR) property transactions decreased.
Interest rates were another major homeownership factor in 2023. While the US Fed rates did not move as aggressively as they did in 2022, they remained high across the year; the latest December 2023 US Fed meeting concluded with US Fed interest rates benchmarking at 5.25% to 5.50%. Concerns around inflation, the possibility of mortgage rates going up, and uncertain economic conditions resulted in some property seekers temporarily retreating from the Singapore property market.
In the latter half of 2023, residential property price growth also indicated signs of moderating. Both public and private housing prices reached a steadier state. The continuous rollout of BTO launches, especially in choice estates, shifted some demand away from both the HDB and residential private markets.
That said, the demand for million-dollar HDB flats continued to persist in 2023 from 2022. 2022 saw a record 369 million-dollar HDB flat transactions. In comparison, 470 million-dollar HDB flats transacted across 2023.
Meanwhile, the Singapore rental market saw some demand pulled away as tenants started moving into their newly completed homes; 20,000 units are projected for completion by the end of 2023.
These numbers are drastically higher than before 2019, when the COVID-19 pandemic induced manpower crunches and construction delays, ultimately increasing waiting times for houses to be built. On the supply side, more homes and vacated units can likely mean more rental listings.
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Singapore Property Market 2024: What to Expect
In 2024, Singapore’s economy is projected to maintain a consistent growth trajectory. In this case, homeowners may not feel the pressure to lower their asking prices for quicker transactions.
Should high asking prices and interest rates persist, some buyers may end up being priced out of the market. They can consider reviewing options that still offer them value but are more affordable.
In related news, one trend we are observing is a growing interest among buyers in Outside Central Region (OCR) properties near MRT stations. Several major new condos in the OCR in 2023 also saw good launch weekend performances (e.g. Grand Dunman, J’den, and Watten House).
While sales activity will likely be driven by owner-occupiers, investors with enough capital may proceed with purchasing their second properties. One explanation for this is that such property seekers are coming to terms with inflation, high interest rates, and the April 2023 cooling measures as part of their property acquisition costs. This means the latest ABSD hikes may not have reduced the appeal of their choice properties.
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New Projects in 2024
Conclusion
In the first six months of 2024, property prices are anticipated to remain high yet stable. Demand, while subdued, should maintain at a consistent upward trajectory.
The Singapore rental market is projected to experience a gentle deceleration. Although the Singapore housing market’s performance might appear relatively uneventful, its inherent stability is likely to resonate favourably with both investors and homeowners.
PropertyGuru Singapore Property Market Outlook 2024
Our Past Property Market Reports
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