Private home prices up 2.7% in Q4, taking full-year rise to 6.7%

In the fourth quarter of 2023, the cost of homes to be used by private individuals in Singapore was up 2.7 percent. This was due primarily to the sales of new launches at benchmark prices, and the low volumes of transactions.

A rise in Q4 prices has driven the price index upwards from a 0.8 percent rise in Q3 to a 6.7% gain for the last quarter of the year. This is a small decline from an 8.6 percent increase in 2022, or an 10.6 percent increase in 2021.

Tan Tee Khoon, the PropertyGuru Singapore Country Manager is Tan Tee Khoon. He said that price increases between 2023-2024 indicate that the value of homes that are used by private people has reached its highest point.

Tricia Song CBRE’s Head of Research for Singapore and South-east Asia, is Tricia Song. Tricia Song, CBRE’s director of research for Singapore and South-east Asia noted that the prices of homes bought by private homeowners have increased over the past seven years, a streak that began when the lowest point was reached in mid-2017.

According to Song the price hikes in the Outside Central Region (OCR) were much more than the Rest of Central Region (RCR) which experienced an increase of 2.7 percent increase. The primary Core Central Region (CCR) prices also increased by 2.1 percent.

The cost of condos for private owners in OCR rose by 4.6 per cent, quarter-on quarter (qoq) following a 5.5 per cent increase in the third. Prices in CCR climbed only 4.2 percent, however they the price of CCR recovered from a decline of 2.7 percent in the previous quarter.

At the time they launched two launches specifically had impressive numbers. CapitaLand’s J’Den in Jurong East, sold 323 units at an average of S$2,451 per square foot. UOL’s Watten House in Bukit Timah and SingLand Watten House, located in Bukittimah both sold 100 units for an average of S$3,230 a square foot. foot.

Based on Cushman and Wakefield research chief Wong Xian Yang, the two projects accounted for around half of all new sales generated in the OCR and CCR segments in Q4.

RCR prices dropped by 1.2 percent in the fourth quarter after rising by 2.1 percent during the prior quarter. One Pearl Bank Condo located in Outram is also already sold out.

Analysts have said that a decrease in sales throughout the year and in the fourth quarter, as well as slow price increases outside of OCR indicate an increase in buyers’ resistance to prices that are too high.

Wong, a Cushman & Wakefield analyst, said that prices for non-landed goods are at historic levels. The situation will remain until the end of Q4 2023.

Knight Frank’s head of research Leonard Tay stated that despite the fact that household financial statements are in good shape Buyers are and will continue to be prudent when it comes to their choices for homes.

Lee Sze Teck – Huttons director of analysis and data analysis – explained that the record sales for Q4’s launch indicated “ample capacity” for local buyers, even if foreign buyers didn’t purchase because of the increased Additional Buyers Stamp Duty (ABSD) which was introduced in April of last year.

In Q4, Singaporeans, as permanent residents and foreigners together made up 98.5 per cent of those who purchased homes privately.

Lee explained that the ABSD was introduced in December of this year. The government rolled out ABSD for the first time in its history.

According to the most recent figures published by the Urban Redevelopment Authority, the total value of transactions in private homes was down 27 percent from in Q3. This amounts to 3,800 homes.

Total units sold in the past year were 18,510, down 15% from 21,890 units in 2022. The figure does not include executive condo units.

Landed properties had an increase in sales during the final quarter of the year. In Q4 the cost of houses that were landed increased in 4.5 percent, and reversed the drop of 3.6 percent during the previous quarter. For the entire 2023 the prices of homes that were being landed increased by 7.8 percent in comparison to 9.6 percent in 2022.

The demand for freehold land houses is “evergreen” According to Knight Frank’s Tay and “the most important factor in ensuring that deals are concluded is the lack of supply of available stock”.

Ismail Gafoor is the chief executive director of PropNex Realty. He said that the tiniest increase in sales of detached homes could be the reason for the 4.5 percent growth. There were 43 detached homes during the fourth quarter which was up from 39 in the previous quarter. The cost of a detached house also was up by around 16 percent in QoQ, to S$1,714 for a square foot of land. He said that this could have helped reduce the cost of semi detached homes as well as terraced homes.

According to ERA’s Chief Executive Officer Marcus Chu, more landed deals were pulled because of a price stalemate between buyers and sellers.

Analysts forecast that prices will continue to decrease, between 3 to 5 percent annually.

CBRE’s Song declared that the current price increases will continue to deter demand. The CBRE analyst believes that due to the increasing inventory, prices will continue to slow by 2024. Prices for houses “are likely to continue to fall due to the resiliency of household balance sheets and the low amount of inventory that isn’t being sold”.

According to Tay, the price for HTML0’s launch will remain “higher” because of the construction and land costs that are already incurred.

PropNex Gafoor believes that developers need to set their prices “more effectively” to boost sales during the course of the launch weekend.

Tay pointed out that those looking to preserve capital and appreciation, as well as regular income, are likely to remain on the sidelines until interest rates reach their peak, stabilize, and perhaps reduce, once there is greater clarity about the economic outlook.

Source: https://www.businesstimes.com.sg/property/private-home-prices-27-q4-taking-full-year-rise-67

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