Jurong East’s Jaden Project has set a new benchmark price for suburban condominiums. (CapitaLand)
Private house prices in Singapore rose 2.7% quarter-on-quarter in the last three months of 2023. This is because weak sales and the launch of some luxury projects skewed the government’s price index upwards, while full-year growth remained below the pace of 2022. .
Preliminary figures released by the Urban Redevelopment Authority (URA) on Tuesday showed that price growth accelerated last quarter from a 0.8% rise in the third quarter, due in part to a 27% decline in transactions during the period.
According to the data, home price growth in 2023 will rise at a slower pace of 6.7% compared to 8.6% growth in 2022, and 10.6% in 2021 at the same time as new and existing home transactions plummeted to 7.5%. It has lagged far behind the rise. 18,510 units, the lowest this year.
“Singapore property prices have slowed significantly[in 2023]ending the pandemic-induced surge. The increased supply of completed condominiums has already contributed to significant price stability, and this trend is likely to continue into 2024. We expect this to continue,” said Kristin Sun, senior vice president of research at OrangeTee & Tie.
Expensive projects push up market average
In the fourth quarter, Singapore house prices rose at the fastest pace since the 3.3% rise recorded in the first three months of this year, mainly due to the launch of a series of luxury condominium projects in November.
URA Chief Executive Officer Lim Eng Hwee
Last quarter’s transactions were led by CapitaLand’s 368-unit J’den project in Jurong East, with 327 units, representing 89% of the project, sold at an average price of S$2,475 per square foot, and suburban condos. A new benchmark price was set for the project. , based on PropNex data.
UOL Group also brought to market in November one of the few projects launched this year in Singapore’s core central region, with 114 of the 180 units in the Watten House luxury condominium project as of mid-December, priced at an average price of 3,209 yen. It was sold in Singapore dollars. per square foot.
Despite the success of these projects, private home sales fell to 3,800 units from October to mid-December, down from 5,201 units in the third quarter. Prices rose 6.7% for the full year, the slowest growth since the coronavirus pandemic, when home prices rose 2.2%.
PropNex estimates that excluding private residences, which are the public-private hybrid executive condominium segment, the number of units sold by developers from January to mid-December 2023 totaled approximately 6,400 units, which is the highest number of residential units transacted in 2022. This is 10% less than the 7,099 units.
Ismail Ghafoor, CEO of PropNex Realty, said transactions were weak last year as homebuyers became cautious in the face of rising interest rates, slowing economic growth and increased tariffs on housing transactions. He predicted that builders may adjust prices to maintain sales volume.
“We believe there is still enough liquidity in the market to deploy, and we are looking for projects with as many buyers as possible that meet as many criteria as possible,” Ghafoor said. “Given weak home sales in 2023 and a strong pipeline of new construction sales in 2024, we expect developers to price units more sensitively to drive sales momentum during launch weekends. ”
Slower price growth seen in 2024
The largest increase in prices in the fourth quarter was in the landed housing segment, which includes terraced houses, semi-detached houses, bungalows and shophouses, with average prices increasing by 4.5% compared to the previous three months and 3.6% compared to the previous quarter. % decline was reversed. Third quarter.
Price growth in the non-land sector, which makes up the bulk of the market in Singapore’s skyscraper-dominated city, remained stable in the fourth quarter at 2.2%, the same quarterly growth rate recorded in the previous three months. , which led to price increases. For condos and apartments, he will rise to 6.5% for the full year 2023.
As the government prioritizes housing affordability among its policy objectives, URA last month announced the island nation’s largest semi-annual land sale plan since 2013, with the plot sales schedule from January to June adding to Singapore’s pipeline. It is planned that 5,450 housing units will be added to the area.
Including future programmes, URA counts 59,100 homes for the Singapore market, of which almost three-quarters, or 39,700, are scheduled to be completed between 2023 and 2025.
This supply has analysts predicting a market slowdown, with PropNex predicting home price growth will slow to 3-4% this year, while OrangeTee predicts an average of 3-6%. expected to rise.
Wong Hsiang Yang, head of research at Cushman & Wakefield, said while homebuyers remain selective as home prices and interest rates remain high, private home prices remain resilient this year. He said it is likely to be maintained.
“Competition for buyers will continue to be fierce, and developers are expected to set reasonable prices for launches,” Wong said. “Nonetheless, we do not expect new product launch prices to decline given the still high development costs and relatively low levels of unsold inventory.”