HDB Resale Price Growth Slows, up 1.3% In Q3 2023, Private Home Prices Post Marginal Increase of 0.8% In Q3 2023 and More
24 October to 30 October 2023
Resale prices of Housing and Development Board (HDB) flats increased 1.3% in the third quarter of 2023, slowing from the 1.5% growth registered in the previous quarter. Meanwhile, private home prices in Singapore climbed by 0.8% in Q3 2023, reversing the 0.2% decline in Q2 2023.
1. HDB resale price growth slows, up 1.3% in Q3 2023
Resale prices of Housing and Development Board (HDB) flats increased 1.3% in the third quarter of 2023, slowing from the 1.5% growth registered in the previous quarter, revealed HDB.
The figure is also lower compared to the 2.5% average quarterly growth seen in 2022.
“We are seeing some moderation in the rate of increase in resale prices since the government’s implementation of a strong pipeline of supply, as well as the cooling measures to promote a stable and sustainable property market,” noted HDB.
The cooling measures include a 15-month wait-out period for private property owners who wish to buy a non-subsidised HDB resale flat and the lowering of loan-to-value limit for HDB housing loans.
Meanwhile, resale transactions increased 2.8% to 6,695 cases in Q3 2023 from 6,514 cases in Q2 2023. On an annual basis, resale transactions fell 11.3% – marking the lowest third quarter volume since 2020.
Despite this, the number of million-dollar flat transactions for this year may exceed the record set in 2022, reported Singapore Business Review.
Notably, 369 million-dollar HDB flats have been transacted as of 27 October – which is similar to the number of flats sold for the whole of 2022, said PropertyGuru.
2. Private home prices post marginal increase of 0.8% in Q3 2023
Private home prices in Singapore climbed by 0.8% in Q3 2023, reversing the 0.2% decline in Q2 2023, revealed the Urban Redevelopment Authority (URA).
It noted that the average quarterly price hike of about 0.3% over the last two quarters was “significantly lower than the average quarterly increase of 2.1% in the whole of 2022”.
In Q3 2023, landed property prices fell 3.6%, following a 1.1% growth in the previous quarter.
Prices for non-landed properties, on the other hand, rose 2.2%, reversing the 0.6% decline posted in Q2 2023.
Non-landed property prices in the Core Central Region (CCR) fell 2.7%, while the Rest of Central Region (RCR) and Outside Central Region (OCR) saw prices grow 2.1% and 5.5%, respectively.
Meanwhile, rents for private homes rose 0.8% in Q3 2023, slowing from the 2.8% hike registered in Q2 2023.
This comes as rental growth for non-landed properties and landed properties both slowed to 0.2% and 4.4% during the period under review, from the previous increase of 2.3% and 6.7%, respectively.
For the whole of 2023, Savills expects overall rents for private non-landed homes to increase by up to 10% primarily due to the momentum built up during the first half of the year.
3. Luxury home market sees slower transactions following money-laundering crackdown
Singapore’s luxury residential market is facing challenges as foreign buyers contend with various factors including higher interest rates, an increase in Additional Buyer’s Stamp Duty (ABSD) and heightened scrutiny following a recent money-laundering crackdown, reported The Business Times.
Industry experts said transaction volumes for prime condominiums, landed homes and conservation shophouses are slowing down.
For instance, two mainland Chinese buyers, who were permanent residents in Singapore, encountered delays in obtaining housing loans from banks, which led to the lapse of their option to purchase.
With foreign buyers becoming more apprehensive amid the increased complexity and scrutiny in their property transactions, landlords of Good Class Bungalows (GCBs) have become more willing to negotiate rents.
They have also become more prudent, with agents expected to be more thorough with their due diligence on prospective tenants.
Data compiled by CBRE for The Business Times showed that median rents of detached homes in GCB areas dropped 2.5% in Q3 2023 to $4.60 psf by floor area.
It also takes a longer time to rent out a GCB now – at around two to three months from about a month in 2022, said Han Huan Mei, Research Director at List Sotheby’s International Realty.
4. Luxury condos now more appealing to buyers
OrangeTee believe that luxury condos may be more attractive to buyers now that the median price per sq ft (psf) gap between non-landed resale homes within the CCR and those in the RCR has narrowed from 24.1% in Q2 2023 to 17.5% in Q3 2023, reported Singapore Business Review.
The gap stood at 27.5% in Q1 2023.
OrangeTee noted that the price gap in Q3 2023 was the smallest since Q3 2001, when it was at 14.5%.
Overall resale home prices recorded a slight recovery, with average prices of resale private homes increasing 0.9% to $1,631 psf from $1,616 psf.
This comes as average resale prices of landed properties jumped 13.1%, while resale prices of non-landed properties fell 0.9% on a quarter-on-quarter basis.
Notably, median prices in the RCR increased at a faster pace than in the CCR. Over the course of 13 quarters during the pandemic, median prices in the CCR rose by 13.6% to $2,011 psf in Q3 2023 from $1,771 psf in Q3 2020. The RCR, on the other hand, saw median prices of resale condos jump 26.8% to $1,711 psf in Q3 2023 from $1,349 psf in Q3 2020.
Looking ahead, overall resale prices are expected to gradually increase by 4% to 6% in 2023, down from 2022’s 8.7%.
5. About 8,600 households to share feedback on public housing experience
About 8,600 households and single occupiers in HDB flats will be invited to participate in HDB’s latest Sample Household Survey (SHS) 2023/2024 between this October and April next year, said HDB.
The survey is conducted every five years since 1968, with the aim of gathering “residents’ feedback on their public housing experience and understanding their changing needs and expectations”.
For this year, the survey will cover three main areas – HDB population, residents’ social well-being and physical living environment.
Singles aged 21 to 54 years, who are listed as occupiers in HDB units and who do not own HDB flats will be invited to share their views on housing needs and aspirations, marriage as well as their outlook in life.
The survey will also examine the residents’ well-being on three levels – family, personal and the community. It will uncover insights on how to help communities be resilient via physical and social infrastructure.
Media Research Consultants has been commissioned by HDB to conduct the surveys, with the results expected to be ready in 2025.
6. Influx of Hong Kong expats to spur leasing demand for prime district homes
A potential influx of Hong Kong expats may reverse the declining trend in residential leases.
“We got feedback from agents from the ground, not only from Savills, but across agencies. The common theme in the second quarter was that there had been some inquiries and some signing of leases by expats that came from Hong Kong or were going to be relocated from Hong Kong to Singapore,” Savills Singapore Executive Director of Research and Consultancy Alan Cheong told Singapore Business Review.
While the interest may not be a “big wave”, it is expected to have a positive impact on the market.
This comes as most Hong Kong expats in Singapore hold C-suite positions and have monthly budgets of between $10,000 and $25,000 for renting apartments. They are expected to rent in prime districts such as Districts 9, 10 and 11.
Expats with budget constraints, on the other hand, will likely rent in Singapore’s east coast in District 15, where monthly rent for a three-bedder apartment range between $4,000 and $6,000, said Cheong.
7. Man who ran one of biggest rental scams in Singapore jailed
Zeng Xianfu Gibson – the man behind one of the biggest rental scams in Singapore – has been sentenced to three years and seven months’ imprisonment, after pleading guilty to 23 cheating charges, reported CNA.
The 29-year-old former sales executive at rental firm Singapore Housing Company misused the photos he took of rental units during his employment to scam 68 victims out of almost $383,000.
Between 2018 and 2020, Zheng used the photos on Airbnb even as he had no authority to rent out such units. To bolster his listings’ authenticity, he provided actual images of the units and prepared fake tenancy agreements to deceive victims.
His victims came from various countries and included locals and international students seeking short-term accommodation. The amounts scammed from the victims ranged from $7,000 to $16,635 as “deposits”.
Zeng delayed victims move-in dates with false excuses, such as the outgoing tenant having contracted COVID-19.
In seeking for 47 months’ jail for Zheng, the prosecutor pointed that the offences “were committed at a time where competition for rental units in the market was high due to limited supply and high demand”. This caused significant inconvenience and anxiety among his victims.
8. Malaysia to negotiate continuation of Shuttle Tebrau train service
Malaysia plans to negotiate with Singapore for the continuation of the Shuttle Tebrau train service between Woodlands and Johor Bahru Sentral even as the Johor Bahru-Singapore Rapid Transit System (RTS) Link has started operations, reported CNA.
Notably, the termination of the shuttle service is one of the conditions agreed upon by Malaysia and Singapore for implementing the RTS project.
“I personally feel that it is not wrong if we have more connectivity between the two countries … which gives choices to passengers,” said Malaysia’s Transport Minister Anthony Loke.
The JB-Singapore RTS Link is anticipated to start operations by end-2026, serving around 10,000 passengers per hour each way, easing traffic congestion on the Causeway.
Commenting on Shuttle Tebrau’s ridership, Loke shared that a 7% increase was registered this year, with the average passengers per day standing at 8,635.
He added that measures to enhance the train service’s capacity have been taken, which include increasing the number of coaches per operation to eight from four as well as the frequency of train operations to 36 from 31.
9. Shophouse market to underperform in 2023
The shophouse market is expected to register weaker transaction volume this year compared to 2021 and 2022, as investors bid their time amid the limited selection of choice shophouse units available for sale and firm prices due to previous growth, reported Singapore Business Review.
Moreover, the flight-to-safety mindset among investors following the pandemic has also waned, said PropNex.
In Q3 2023, shophouse sales dropped 19% quarter-on-quarter to 38 deals. This brings the total deals for the first nine months of 2023 to 117 worth almost $1.1 billion, down from 155 deals worth $1.3 billion over the same period last year.
PropNex stated that the shophouse market appears “on track to underperform the stellar sales achieved in 2022 and 2021”, when 191 and 253 deals were closed, respectively.
It also expects leasing activity to slightly ease this year amid the higher rentals and more cautious environment due to muted economic growth outlook.
Shophouse median rentals moderated by 3.98% quarter-on-quarter to $5.97 psf per month in Q3 2023.
Nonetheless, PropNex expects the shophouse investment sales market to remain “fairly resilient”, on the back of support from investors seeking to add a defensive asset in their portfolio and occupiers seeking space for business operations post-pandemic.
10. New industrial supply to outweigh demand
Landlords, particularly of new industrial projects, may have to lower rents to attract or retain tenants, reported Singapore Business Review.
This comes as new supply surpass demand.
“With weaker demand relative to new supply, there is likely to be lower leasing interest and activity,” said Colliers.
Huttons data showed that another 2.2 million sq m of industrial space may be completed in Q4 2023 and 2024. Between 2024 and 2026, Colliers also expect an average annual supply of 1 million sq m, exceeding the 0.7 million sq m average annual demand over the last three years.
CBRE said cautious sentiment has been evident among occupiers in Q3 2023, with most leasing activities driven by relocations and renewals.
However, some experts remain optimistic that leasing activities may pick up by end-2023, on the back of improving manufacturing economy.
“Even though manufacturing output and contribution to GDP contracted during the year, industrial real estate indicators of occupancy levels, prices and rents have been resilient for most industrial property types, weathering the challenges of falling exports, supply chain uncertainty and a gloomy global manufacturing outlook,” said Knight Frank.
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Cheryl Chiew, Content Marketing Manager at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.
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