Huttons’ comments on URA 3Q 2023 numbers

The property market returned to growth in 3Q 2023 backed by strong sales in project launches. Property prices grew by 0.8% quarter-on-quarter (QoQ) in 3Q 2023 and 3.9% year-on-year (YoY). Compared to the last peak in 3Q 2013, property prices are 26.8% higher.

The cooling measures on 27 April 2023 had a greater impact on the Core Central Region (CCR) as the proportion of foreigners buying residential properties tends to be higher. Sales in the CCR plunged by around 20.8% in 3Q 2023 compared to the previous quarter. Prices have also dropped by 2.7% in 3Q 2023.

Prices in the Outside Central Region (OCR) jumped the most by 5.5% in 3Q 2023 while the Rest of Central Region (RCR) prices increased by 2.1%.

Developer sales
A total of 2,805 units across nine projects were launched for sale in 3Q 2023. The nine projects were Grand Dunman, Lentor Hills Residences, Orchard Sophia, Pinetree Hill, The Arden, The Lakegarden Residences, The Myst, The Shorefront and TMW Maxwell. This is the largest launch by units in a quarter since 1Q 2021.

Developers sold a total of 1,946 units in 3Q 2023 which is slightly lower than the previous quarter. In the first nine months of 2023, developers have sold 5,329 units, 16.9% lower than the corresponding period a year ago. The nine project launches accounted for 1,417 units or 72.8% of sales in the third quarter of 2023.

Figure 1: Developer’s New Sales Volume

Source: URA monthly developer sales, Huttons Data Analytics as of 27 Oct 2023

The top three bestselling projects in 3Q 2023 are Grand Dunman, Lentor Hills Residences and The Myst.

Being the one and only mega launch in 2023, Grand Dunman generated a lot of buzz and attracted about 10,000 people on the first weekend of preview. Grand Dunman sold 580 units in 3Q 2023, making it the bestselling project in 2023 and in more than two years. Lentor Hills Residences recorded strong sales, selling almost 400 units. The 1- and 2-bedrooms are the most popular due to investment demand and family sizes getting smaller over the years. The Myst sold more than 150 units, attracting owner occupiers who like the area for its proximity to nature, good primary schools and Cashew MRT station.

Table 1: Top Ten Bestselling Projects in 3Q 2023

Source: URA, Huttons Data Analytics as of 27 Oct 2023

Resale Market
The resale market bore the brunt of the higher for longer interest rate in 3Q 2023. The higher interest rate led to a slight dip in prices of 0.6% in the resale market. Transaction volume in 3Q 2023 is 2.6% lower than the previous quarter as price sensitive buyers are priced out.

Figure 2: Resale Volume and Prices

Source: URA, Huttons Data Analytics as of 27 Oct 2023

The subsale market continued to see good demand in 3Q 2023 as it offers buyers the opportunity to move into a new home either immediately or in a shorter time compared to new sale. The substantial price gap of 20% to 30% between a new sale and sub sale unit which is drawing more buyers to this segment of the market.

Table 2: Breakdown of Private Residential Sales

Source: URA, Huttons Data Analytics as of 27 Oct 2023

Rents
There were 8,517 private residential units completed in 3Q 2023, 93.5% higher than 2Q 2023. In the first nine months of 2023, a total of 15,388 private residential units were completed. With little incremental demand to absorb the new supply of condos, landlords came under more pressure to retain tenants in 3Q 2023 and rents inched up by 0.8%. This is the slowest quarter growth in rents since 4Q 2020 and all segments of the residential market saw significantly lower increase in rents.

Buyer’s Profile
After the cooling measures, the proportion of foreigners purchasing residential properties in Singapore in 3Q 2023 more than halved to 1.7% compared to 4.0% a quarter ago. In 3Q 2023, US citizens are the number one foreign purchasers of residential properties in Singapore, followed by China citizens in second. Singaporeans and PRs made up a larger portion in 3Q 2023 as more buyers wait for either their PR or citizenship before buying a property in Singapore.

39.5% of the transactions in 3Q 2023 are priced below $1.5 million, 28.2% are between $1.5 million to $2 million and 32.4% above $2 million. More than 80% of purchases are by Singaporeans with PRs and foreigners making up 16.9% and 1.7%, respectively, in 3Q 2023.

The number of non-landed deals worth $10 million or more has more than halved from 20 in 2Q 2023 to 8 in 3Q 2023. In view of the higher taxes, some buyers have adjusted their budget.

Table 3: Comparison of Price Range and Residential Status (All Sale Types) in 3Q 2023

Source: URA, Huttons Data Analytics as of 27 Oct 2023

Figure 3: Comparison of Nationalities among Buyers (All Sale Types)

Source: URA, Huttons Data Analytics as of 27 Oct 2023

Executive Condominiums
The only EC launch in 2023, Altura saw strong sales in 3Q 2023 and is close to 90% sold. There had not been an EC in Bukit Batok for 22 years and many buyers were looking forward to it. North Gaia, an EC in Yishun also saw steady sales in 3Q 2023.

Developers have sold 420 EC units in 3Q 2023, the highest sales volume since 4Q 2022. As of 3Q 2023, 319 launched EC units remain unsold in the market.

Market Outlook
Based on advance estimates, Singapore’s economy grew by 0.7% on a year-on-year (YoY) basis in 3Q 2023, faster than the previous quarter 0.5% YoY growth.

Property prices are likely to stabilise after the high growth over the past two years.

This is due to the uncertain economic outlook and higher for longer interest rates. Growth in employment and wages have slowed leading to more cautious sentiments. The higher for longer interest rate environment is providing investors alternative options to property investment while at the same time pricing out some buyers and limiting the price gains.

There will be another 4 project launches with a total of 1,048 units in the last quarter of 2023. This will bring launched units to an estimated 7,539 for 2023. This is less than the original forecast of up to 12,000 units launched for sale in 2023 but nevertheless 66.5% higher than the 4,528 units launched for sale in 2022.

Developer sales could end the year between 6,000 and 6,500 units as buyers turn cautious. Prices of new homes should trend higher by up to 5% in 2023 on the back of resilient demand.

In 1Q 2024, there may be another 11 projects with a total of 2,757 units slated for launch. 27% of the units are in the CCR, 16% in the RCR and the remaining 57% in the OCR. Barring unforeseen circumstances, prices are estimated to grow at a lower rate of up to 3% in 2024.

Table 4: Potential Upcoming Projects in 4Q 2023 and 1Q 2024

* in alphabetical order followed by chronological order
Source: URA, Huttons Data Analytics as of 27 Oct 2023

Contact:
Lee Sze Teck
Senior Director, Data Analytics
(65) 9183-6367
szetecklee@huttonsgroup.com