Guess which Singapore submarket saw the fastest residential price growth in Q3

Private home prices rose by 0.5% during the quarter.

Overall prices rebounded in the third quarter of 2023, albeit at a marginal pace of 0.5 per cent in Q3 2023, according to flash estimates from the Urban Redevelopment Authority (URA).

Although prices accelerated from the 0.2 per cent decline in the first quarter, this is the second consecutive quarter when price gains were less than 1 per cent and lower than the past three year’s average price growth of 2.1 per cent from Q3 2020 to Q2 2023, according to OrangeTee Research. 

Year to date, prices edged up 3.6 per cent in the first nine months of this year, a smaller increment compared to the same periods in 2022 at 8.2 per cent and 2021 at 5.3 per cent.

Here’s more from OrangeTee:

Among the sub-markets, prices rose the fastest by 5.1 per cent for condominiums in the suburbs or outside the central region (OCR), followed by the city fringe or Rest of central region (RCR) with 2.3 per cent gains. 

Conversely, prices of landed properties dipped by 4.9 per cent, while condominium prices in the luxury or the core central region (CCR) dipped by 2.6 per cent. This is the second consecutive price decline for the luxury market, possibly due to the increased ABSD and pullback in foreign purchasers. 

Why did prices rebound in Q3?

Prices climbed faster last quarter, possibly due to a higher proportion of new home sales, and new homes are usually sold at higher prices. Based on URA realis data, 41.8 per cent of total transactions (landed and non-landed excluding executive condominiums or ECs) in Q3 2023 were new home sales, more than 38.1 per cent in Q2 and 28.9 per cent in Q1.

Most of the new launches were from OCR and RCR last quarter; thus, prices rose faster in these two segments. For example, the new launches in OCR include Lentor Hills Residences, The Myst, The Lakegarden Residences and The Arden. The new launches in RCR were Grand Dunman, and Pinetree Hill. 

Outlook

Interest rates are now staying higher and longer than markets had earlier anticipated. Homeowners face steeper monthly payments amid higher costs of living. 

As more banks revise the mortgage rates to above 4 per cent for their floating packages, the affordability threshold of potential buyers will be further reduced. Therefore, markets may continue to face pushback against higher prices. 

As such, price growth may remain moderate for the rest of the year.  We estimate that overall prices may grow by 4 to 5.5 per cent for the whole of 2023.