Residential property prices fluctuate in 2023, with minimal quarterly increases

Some experts expect rental growth for the remainder of 2023.

With the ongoing interest rate rise, macroeconomic uncertainties, and market supply dynamics, residential property prices experience continuous fluctuation, with minimal quarterly increases and declines.

According to the URA, private residential property prices increased by 0.8% in the third quarter of 2023, following the 0.2% decline in the second quarter (Q2) of 2023.

The average quarterly price increase of around 0.3% since Q2 2023 was significantly lower than the average quarterly increase of 2.1% for 2022.

However, CBRE Research expects grade A rents to eventually grow by 1.5%-2.0% for 2023, outpacing GDP growth but slower than the 8.3% rental growth in 2022.

“Expatriate demand has slowed with the economic slowdown and temporarily-displaced owners move into their newly completed homes as the backlog clears. Thus, we expect rents to start easing over the next few quarters,” CBRE said.

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Meanwhile, PropNex projects the overall private home price growth to be between 4% and 5% for the whole of 2023.

Propnex also noted that one of the key factors that drives property market performance is buyer/investor sentiment. “Buyers turn cautious, which leads to a pull-back in sales activity, and this cautious sentiment then feeds on itself and may prompt others to defer their purchase.”

SRI noted that a steady influx of new launches is expected to come into the market which will gradually gain momentum particularly in strategically located projects situated in sought-after locations.

“A total of 5,329 new home sales units have been transacted in the first nine months of 2023, we are estimating new home sales to be in the range of at least 5,800 to 6,800 for the entire year of 2023,” SRI said.

Huttons, however, noticed a positive shift in Singapore’s economy stating that on estimate, Singapore’s economy grew by 0.7% YoY, faster than the previous quarter's 0.5% YoY growth.

“Property prices are likely to stabilise after the high growth over the past two years,” Huttons said.

“Going forward, retailers will continue to evolve and adopt new tools to obtain trend-based competitive advantages over competitors for the attention and spending dollar of consumers. With the increasing visitor arrivals, the remaining three months of 2023 will likely see the retail market consolidating the improvements achieved since Singapore opened its borders, culminating in year-end activities to wrap up a largely positive and eventful year,” KnightFrank said.