URA Real Estate Stats - Q3 2023

Among the market segments in the non-landed residential market, the Outside Central Region (OCR) rose the highest at 5.1% q-o-q, followed by the Rest of Central Region (RCR) at 2.3% q-o-q as new price points were established with the project launches in Q3 2023 largely reflecting the land prices that developers paid to acquire these sites 12 to 24 months ago. In contrast however, the Core Central Region (RCR) fell 2.6% q-o-q during the quarter affected by the doubling of Additional Buyer’s Stamp Duty (ABSD) rates from 30% to 60% for foreign homebuyers. The share of foreign homebuyers in this market segment plunged to 6.0% in Q3 2023 (*based on data available as at 2 October 2023), lower than the 11.0% in Q2* and the 15.8% in Q1* before the doubling of the Additional Buyer’s Stamp Duty (ABSD) in April. As a result, new sales in the CCR fell 45.1% q-o-q to 242 units in Q3 2023*. In the secondary market, transaction volume shrank 21.9% q-o-q to 378, bringing total sales in the CCR to 620 in Q3*. Nevertheless, the sole new launch in the CCR during the quarter, the 78-unit Orchard Sophia, managed to sell all 24 units in the first phase that was launched in August.

Investors purchasing for capital preservation, appreciation, and recurring income, both locals and foreigners, will likely remain on the sidelines until interest rates peak and stabilise, and until such time when more optimism returns to the economy.

Nevertheless, history has shown experienced investors familiar with Singapore’s private residential scene, that this window of muted activity can turn quickly with the return of transactional activity once the external environment improves.

General demand for private homes in the remaining months of 2023 will continue to be underpinned mostly by homebuyers purchasing for their own occupation.

Despite household balance sheets remaining healthy, homebuyers have been and will continue to become more circumspect in their housing decisions, targeting locational and product attributes that best fit their lifestyle and family requirements, such as schools.

This, in addition to having to consider the cooling measures announced in April, sticky high interest rates, job security, inflationary and recessionary pressures.

With private home prices having increased by 3.6% (flash estimates) in the first three quarters of 2023, this is on track to fall within Knight Frank’s projection of 3% to 5% for the whole of 2023.

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