Overview:
- Private home prices in Singapore rebounded by 0.8% in the third quarter of 2023, following a 0.2% decline in the previous quarter.
- This growth was driven by non-landed properties in the Rest of Central Region (RCR) and Outside of Central Region (OCR), which rose by 2.1% and 5.5% respectively.
- Landed property prices continued to decline, falling by 3.6% after a 1.1% increase in Q2 2023.
- The rental market experienced a slowdown, with overall rental prices increasing by a modest 0.8% compared to the 2.8% rise in the previous quarter.
Key Performance Indicators:
| Indicator | Q3 2023 | Q2 2023 | Change |
|---|---|---|---|
| Private Home Price Index | 153.9 | 153.1 | +0.8% |
| Non-Landed Property Price Index | 161.1 | 157.7 | +2.2% |
| Landed Property Price Index | 130.3 | 135.1 | -3.6% |
| Rental Price Index | 124.6 | 123.6 | +0.8% |
| Total Transaction Volume | 5,201 | 5,388 | -3.5% |
Market Drivers:
- Rising interest rates: Higher borrowing costs are impacting affordability and dampening demand, particularly among buyers with tight budgets.
- Economic uncertainty: Slowing global economic growth and geopolitical tensions are leading to a cautious approach from potential buyers.
- Increased supply: A significant number of new developments are expected to be completed in the coming years, potentially putting downward pressure on prices.
Segment-Specific Trends:
- CCR: Prices in the Core Central Region (CCR) declined by 2.7%, reflecting a continued correction in this premium segment.
- RCR: Prices in the Rest of Central Region (RCR) witnessed a moderate increase of 2.1%, indicating a more resilient demand in this area.
- OCR: Prices in the Outside of Central Region (OCR) experienced the strongest growth, rising by 5.5%, driven by new launches and relatively lower prices compared to central regions.
Rental Market:
- The rental market is showing signs of softening, with a slower pace of increase in rental rates across all segments.
- Rising vacancy rates, currently at 8.4%, are putting further pressure on rents.
Foreign Buyers:
- The proportion of foreign buyers has significantly decreased, dropping from 4% to 1.7% following recent cooling measures.
- US and Chinese nationals remain the top foreign buyers in the Singapore property market.
Future Outlook:
- Experts anticipate continued price moderation in the coming quarters, with potential fluctuations between slight increases and decreases.
- Demand is likely to remain subdued due to economic uncertainty and high interest rates.
- The increasing supply of new units may further contribute to downward pressure on prices.
Overall, the Singapore property market is entering a period of consolidation and correction. Buyers are adopting a more cautious wait-and-see approach, while sellers are adjusting their expectations to meet the changing market conditions.
Additional Insights:
- The top-selling projects in Q3 2023 were Grand Dunman, Lentor Hills Residences, and The Myst.
- The completion of new developments is expected to reach a record high in 2023, exceeding 20,400 units.
- The property market is expected to remain sensitive to changes in interest rates and the global economic environment.
In conclusion, the Singapore property market is undergoing a significant shift. While prices have experienced a modest rebound in Q3 2023, the future remains uncertain. Closely monitoring market trends and conducting thorough research remain crucial for making informed decisions in the current environment.