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A view of private homes in the Tanglin area in Singapore, on July 9, 2022. Photo: Bloomberg

Singapore’s fourth-quarter private housing price growth slows to 0.2 per cent as sales volume falls

  • Private housing prices grew by 0.2 per cent in the fourth quarter, slowing down from the third quarter’s 3.8 per cent increase, according to the URA
  • Sales volume fell by about 49 per cent in the fourth quarter from the previous three months

Private residential property prices grew by 0.2 per cent in the fourth quarter, according to flash estimates released by URA on January 3. This marks a slowdown from the 3.8 per cent increase recorded the previous quarter and brings total price growth for the whole of 2022 to 8.4 per cent, easing from the 10.6 per cent growth logged in 2021.

The slower price growth comes on the back of a decline in private housing sales. Sale transaction volume fell in the fourth quarter of 2022 by about 49 per cent from the third quarter, and about 60 per cent from a year earlier. For the whole of 2022, sale transaction volume fell by 36 per cent from a year ago.

The lower sales volume in the fourth quarter is in line with the absence of major private residential launches, said Lee Sze Teck, senior director of research at Huttons Asia.

“An estimated 500 to 600 units were launched for sale in 4Q2022 – the lowest quarterly launch volume since 1Q2003 when only 506 units were launched for sale,” he said. On a full-year basis, an estimated 4,500 to 4,600 units were launched in 2022, which is less than half of 2021’s launch volume of 10,496 units.

Nicholas Mak, head of research and consultancy at ERA Realty Network, said that the lower transaction volume follows a dimmer macroeconomic outlook amid interest rate hikes and inflationary pressures, as well as new property cooling measures that may have impacted homebuyers’ decision-making.

Private housing price growth in the fourth quarter was predominantly driven by landed properties, which saw prices rising 0.5 per cent over the quarter, moderating from the 1.6 per cent price growth recorded for the landed segment in the previous quarter. For the whole of 2022, the landed segment posted a price increase of 9.5 per cent, easing from the 13.3 per cent increase in 2021.

Non-landed properties registered a price growth of 0.1 per cent in the fourth quarter from the previous quarter, slowing from the 4.4 per cent increase achieved in the third quarter. This brings full-year price growth for non-landed properties to 8 per cent, lower than the 9.8 per cent increase in 2021.

Properties in the Rest of Central Region (RCR) outperformed the other regions, rising 2.6 per cent over the quarter, following a 2.8 per cent increase recorded in the third quarter.

Tricia Song, head of research, Southeast Asia at CBRE, said that the RCR price increase is largely attributable to high unit pricing at existing projects, namely the 455-unit Rivière and the 774-unit One Pearl Bank. Forty units at Rivière were transacted in the fourth quarter at a median price of S$2,998 (US$2,234) per square foot, while 25 units were transacted at One Pearl Bank with a median price of S$2,569 per square foot.

For the whole of 2022, RCR prices rose 9.2 per cent, moderating from the 16.3 per cent surge registered in 2021.

In the Core Central Region (CCR), private housing prices grew 0.5 per cent in the fourth quarter, easing from the 2.3 per cent growth in the previous quarter. This brings full-year price growth in the CCR to 4.6 per cent, improving from the 3.8 per cent logged in 2021.

Meanwhile, private housing prices in the Outside Central Region (OCR) saw a 2.6 per cent contraction in the fourth quarter, reversing from the 7.5 per cent surge recorded the previous quarter. Ismail Gafoor, CEO of PropNex Realty, attributes the OCR performance to a high base in the third quarter coming off major launches including Amo Residence, Sky Eden@Bedok and Lentor Modern. Despite the contraction, the OCR is the best-performing region for the whole of 2022 with prices increasing 9.3 per cent, higher than the 8.8 per cent growth registered in 2021.

In the coming months, a tight supply of new private homes will continue to support the market even as headwinds dim Singapore’s economic outlook.

“The market could surprise on the upside in 1Q2023, as developers push out new launches catering to resilient buying demand amid still-low levels of unsold inventory,” said Wong Xian Yang, Cushman & Wakefield’s head of research, Singapore.

Leonard Tay, Knight Frank Singapore’s head of research, said that launches characterised by “good property attributes at the correct price-points” will continue to see strong demand. Nonetheless, the weaker economic outlook and higher borrowing costs are expected to temper price growth, with Tay projecting a more moderate 5 per cent to 7 per cent increase for the whole of 2023.