SINGAPORE (EDGEPROP) - According to flash estimates released by URA on April 3, private residential property prices in Singapore grew 3.2% q-o-q in 1Q2023, higher than the 0.4% increase in the previous quarter. On a y-o-y basis, prices were up 11.3%.

“The continued rise in private residential prices reflects unflinching housing demand despite economic headwinds such as higher interest rates and weaker economic growth, and a rise in buyer stamp duties (for high-value properties),” says Wong Xian Tang, head of research for Singapore and Southeast Asia at Cushman & Wakefield.

Independent property market observer Nicholas Mak adds that the acceleration in price growth reflects the market’s resilience following the cooling measures announced in September 2022. “The recovery of the growth momentum of private housing prices in 1Q2023 indicates that the latest round of cooling measures has not knocked the wind out of the sails of the residential property market,” he says.

Prices of both landed and non-landed properties increased last quarter, registering growth rates of 5.7% and 2.5% q-o-q respectively.

The growth in landed home prices were mainly driven by sales at Pollen Collection, Bukit Sembawang’s 132-unit development in Seletar Hills, says Tricia Song, head of research, Southeast Asia, at CBRE. The project has seen take-up double to eight units since its launch in October 2022. “Median prices achieved for its terraced houses rose from $1,893 psf in 4Q2022 to $2,199 psf in 1Q2023,” Song adds.

Leonard Tay, head of research at Knight Frank Singapore, notes that landed home price growth has accelerated from the 0.6% q-o-q increase recorded in 4Q2022, supported by strong demand. “Buyers remain resolute in their aspirations to acquire this scarce housing format in high-rise Singapore, knowing that premiums are needed to prise these from existing owners,” he explains.

Non-landed home prices also grew at a faster pace compared to the previous quarter, when a 0.3% q-o-q increase was charted. Price growth in 1Q2023 was led by the Rest of Central Region (RCR), where prices increased by 4% q-o-q, compared to the 3.1% increase in the previous quarter. The growth comes on the back of new projects launched last quarter, including the 270-unit Terra Hill at Yew Siang Road. The project set a new price benchmark of $2,650 psf for the neighbourhood during its launch weekend in February.

Prices in the Outside Central Region (OCR) increased by 1.9%, reversing from a 2.6% decrease in 4Q2022. Price growth was backed by the launches of Sceneca Residence in Tanah Merah and The Botany at Dairy Farm at Dairy Farm Walk, which achieved prices of $2,072 and $2,070 psf respectively.

In the Core Central Region (CCR), prices for non-landed homes increased by 1% q-o-q, versus 0.7% growth the previous quarter. “​​We have seen increased take-up in ongoing project launches in CCR as the price gap between CCR and OCR/RCR narrows,” observes CBRE’s Song.

In terms of overall volume, Song notes that 1,178 new homes were sold in 1Q2023, based on caveats lodged as of April 3. This represents a 70.7% increase from the 690 units sold in 4Q2022, though Song concedes the figures are still “significantly below” the historical average.

Lee Tze Teck, senior director of research at Huttons Asia, comments that 1Q2023 saw more foreigners return to the local residential property market. Referring to caveats as of March 31, foreign buyers picked up an estimated 127 out of 1,403 new project units. Lee says the top projects favoured by foreigners in 1Q2023 were Riviere (21 units), Klimt Cairnhill (20 units), Perfect Ten (10 units), Leedon Green (seven units), Pullman Residences Newton (seven units) and The Botany at Dairy Farm (five units).

Looking ahead, CBRE’s Song believes the more cautious sentiment observed among buyers in the market – brought on by high interest rates, tighter financing conditions and a slowing economy – may prevail in the coming months. Nonetheless, she has kept her forecast of 7,500 to 8500 new private home sales in 2023 unchanged for now, in view of upcoming launches such as Tembusu Grand, The Continuum and Lentor Hill Residences which may drive demand. “The performance of these projects would provide a clearer indication of underlying home-buying appetite,” she says.

Cushman & Wakefield’s Wong expects private home prices to still see positive growth this year, albeit at a slower pace of about 3% to 5%, compared to the 8.6% surge recorded last year. He sees prices supported by a few factors, including a stable job market, sustained HDB upgraded demand due to rising HDB resale prices, the reopening of China, and the low levels of unsold inventory. (Find HDB flats for rent or sale with our Singapore HDB directory)

Check out the latest listings near Pollen Collection, Terra Hill, Sceneca Residence, The Botany at Dairy Farm, Riviere, Klimt Cairnhill, Perfect Ten, Leedon Green, Pullman Residences Newton, Tembusu Grand, The Continuum, Lentor Hills Residences