Singapore home price growth at its slowest pace in over two years

Private home prices inched up by just 0.4% in Q4 2022.

According to PropNex, the growth momentum of Singapore home prices eased to the slowest pace in more than 2 years in Q4 2022, as a combination of fresh cooling measures implemented in September 2022, elevated interest rates, depleted supply of new private housing stock, and post-pandemic revenge travel weighed on home sales in the quarter. 

New home sales volume (ex. EC) in Q4 2022 also hit a 14-year low – the 690 units transacted is the lowest since Q4 2008 where 419 units were sold.

Here’s more from PropNex:

Figures from the Urban Redevelopment Authority (URA) showed that overall private home prices rose at a slower pace in Q4 2022, inching up by 0.4% QOQ – following a 3.8% growth in the previous quarter. The final print is slightly higher than the flash estimates (+0.2% QOQ) released earlier this month.

Q4’s price increase is the slowest quarterly growth since Q2 2020 where prices rose by 0.3% QOQ. For the whole of 2022, private home prices increased by 8.6% from the end of 2021, marking the 6^th straight annual growth in prices from 2017. The price growth in 2022 is within PropNex’s expectations. With an index reading of 188.6, the URA PPI is at a new record high.

The Landed private homes segment led the price growth in Q4 2022, with prices rising by 0.6% QOQ and posting the 6^th straight quarter of increase. For the full year 2022, private landed home prices climbed by 9.6% - marking the 5^th consecutive year of price growth - further building on the 13.3% price increase in 2021. Landed homes are among the most coveted real estate properties in Singapore, owing to their scarcity and exclusivity. The uplift in prices has been supported by demand for larger homes and the relatively limited stock of landed homes on the market.

Meanwhile, prices of non-landed private homes inched up by 0.3% QOQ during the quarter, slowing substantially from the 4.4% increase achieved in Q3 2022, as a dearth of new project launches and the seasonal lull put a drag on the market.

By sub-markets, the Rest of Central Region (RCR) posted the fastest price growth in Q4, with home prices climbing by 3.1% QOQ, after rising by 2.8% in the previous quarter. Riviere was the best-selling RCR project (46 units) in Q4 2022, achieving a higher average unit selling price from Q3 to Q4 at $2,994 psf from $2,890 psf.

Meanwhile, Core Central Region (CCR) non-landed home prices rose at a slower pace of 0.7% QOQ in Q4, compared to the 2.3% QOQ growth in Q3 2022. Perfect Ten was the top-selling project, transacting 58 units at an average price of $3,013 psf – up by about 2% from $2,956 psf in the previous quarter.

Home prices in Outside Central Region (OCR) declined by 2.6% QOQ in Q4, following a strong 7.5% increase in Q3. The lack of new major launches (ex. EC) in this sub-market in Q4 has dent price growth, particularly since several new launches (Amo Residence, Lentor Modern, and Sky Eden @ Bedok) had helped to spur price increase in the previous quarter. The most popular new launch project in OCR during the quarter was Lentor Modern which sold 21 units at an average price of $2,129 psf, relatively on par with $2,124 psf in Q3.

In terms of sales volume, developers sold 690 new private homes (ex. EC) in Q4 – marking a sharp 68.4% drop from 2,187 transacted in Q3 2022; it is also the lowest quarterly sales figure since 419 units were transacted in Q4 2008. In Q4 2022, developers launched just 504 new private homes (ex. EC) for sale, compared to 1,455 units in the previous quarter. For the whole of 2022, 7,099 new homes (ex. EC) were sold - down by 45.5% from 2021 and is the lowest annual developers’ sales since 2008. This comes as the number of units launched fell from 10,496 units (ex. EC) in 2021 to 4,528 units in 2022. 

Meanwhile, the resale market activity also moderated, with transactions falling by 27.6% QOQ to 2,694 units. For the full year, 14,026 resale private homes were sold – sharply lower than the 19,962 units resold in 2022, but higher than the 5-year average (2017-2021) of 13,338 units.

The private home leasing market continued to strengthen, with rentals rising by 7.4% QOQ in Q4 2022, taking the full year rental increase to 29.7% from end-2021. With 19,291 new private homes (incl. EC) due to be completed in 2023, they may possibly bolster rental stock and could help to bring about a slower pace of rental growth in 2023.