Singapore private home prices record slowest quarterly hike in two years

Home prices inched up 0.2% in Q4 2022. 

Overall home prices in Singapore only increased by a mere 0.2% q-o-q in the final quarter of 2022. According to JLL, this was driven by the rising macroeconomic uncertainties, the new cooling measures effective from 30 September 2022, and slower market activities towards end-2022.

“This is a drop from the 3.8% registered in 3Q22 and the slowest quarterly price increase since the market bottomed in 1Q20 when prices fell 1.0% q-o-q,” said Chia Siew Chuin, Head of Residential Research, Research & Consultancy at JLL.

Here’s more from JLL:

While the overall price index rose just 0.2% in 4Q22, price growth was sustained on the positive trajectory by the slightly larger price increase of 0.5% in the landed segment, compared to the 0.1% rise in non-landed home prices. Notwithstanding the slower q-o-q price gain in the landed segment (0.5% in 4Q22 vs 1.6% in 3Q22), the limited supply of landed homes and steady demand likely contributed to the continued rise in prices.

The weak 0.1% rise in prices for the non-landed segment is weighed down by the 2.6% q-o-q price fall of non-landed homes in Outside Central Region (OCR). The price fall in 4Q22 is likely to be due to the lack of new project launches in the quarter and a normalisation of prices after higher benchmarks were set by major key project launches in the OCR in 3Q22 – Bullishly priced projects in OCR, such as AMO Residence and Lentor Modern contributed to the 7.5% price surge in 3Q22 in the submarket. Buyers, including HDB flat upgraders, are likely to have also turned more cautious towards higher prices following the latest market curbs amid rising macroeconomic uncertainties.

Notwithstanding the weight from the OCR, the overall price movement of non-landed homes was kept in balance, lifted by the 2.6% q-o-q increase in the Rest of Central Region (RCR), keeping pace with the 2.8% registered in 3Q22. In the Core Central Region (CCR), prices inched up by 0.5% q-o-q in 4Q22, moderating from 2.3% rise in the previous quarter.

For the entire of 2022, the overall private residential price index has risen 8.4%, lower than the 10.6% hike in 2021. The coveted landed segment posted an increase of 9.5% in 2022. In the non-landed home segment, where prices were up 8.0% in 2022, the OCR was the top performer for the whole year, with prices escalating 9.3% year-on-year (y-o-y), followed by the annual increase of 9.2% in RCR and the 4.6% rise in CCR. The OCR largely attract a wider owner-occupier buyer base, including the HDB flat upgraders who are drawn to more affordable prices in this market segment. HDB upgraders have also benefitted from a healthy HDB resale market which saw resale flat prices strengthen by 10.3% in 2022, albeit slower than the 12.7% increase in 2021, according to flash estimate. 

RCR’s performance may be attributed to the submarket’s owner-occupier and investment demand base, the submarket’s general city-fringe location, as well as the relative price and rental competitiveness compared to the CCR.

In 2023, the residential market will continue to face uncertainties arising from the cooling measures, rising interest rates and weak macroeconomic outlook. Nonetheless, the penchant to own or invest in private homes has remained strong and further supported by healthy household liquidity. Barring adverse turn of events that might lead to a severe recession, the employment market is expected to remain tight and underpin market confidence. 

On supply, developers’ strong financial position and low unsold inventory will give them little pressure to reduce prices. Depending on developers’ strategy and calibration, potentially some 11,000 private home units (excluding ECs) will be available for launch from new projects in 2023. An estimated 3,390 private home units (excluding EC) will also be made available from the Confirmed List of the Government Land Sales programme in first half of 2023, although these will likely only come on stream later towards the end of the year and beyond. The measured increase in supply might help to stabilise price growth of private homes to some extent. Private home prices are projected to continue rising at a slower rate by 2% to 4% in 2023.