Private home prices in 1Q2023 up 3.3% q-o-q, driven by landed property, city-fringe condos

/ EdgeProp Singapore |
Pollen Collection saw four terraced houses sold in 1Q2023 at a median price of $2,196 psf (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) - URA's property price index showed private home prices rose by 3.3% q-o-q in Q1 2023, accelerating from 0.4% in Q4 2022. It's the 12th consecutive quarterly increase, says Tricia Song, head of research, Southeast Asia, CBRE.
"This is slightly higher than the initial flash estimate of 3.2% q-o-q," Song adds. "Private home prices have risen 28.1% since bottoming in 1Q2020, at the onset of COVID-19."
The price increase in 1Q2023 was driven mainly by landed properties which rose 5.9% q-o-q, faster than the 0.6% q-o-q increase recorded in 4Q2022. This was attributed mainly to the new landed project, Bukit Sembawang Estates' 132-unit Pollen Collection in the Nim Road neighbourhood, off Ang Mo Kio Avenue 5. The project saw take-up doubling to eight units in 1Q2023 since its launch in Oct 2022. Median prices for its terraced houses at Pollen Collection rose from $1,860 psf in 4Q2022 to $2,196 psf in 1Q2023.
A new price record was set in 1Q2023 when a terraced house in the Emerald Hill Conservation Area changed hands at a new high of $5,756 psf, which is 43.5% above the previous record of $4,010 psf for a terraced house in the Blair Plain Conservation Area, Eugene Lim, key executive officer, ERA Realty Network, points out. "Amid the lack of new supply, homebuyers are willing to pay more for landed properties," he says.
"The jump in landed property prices could be due to reasonably thin transaction volume in 1Q2023, which is skewed towards new launch sales," says Wong Xian Yang, head of research Singapore & SEA at Cushman & Wakefield. "Sustained growth in landed property prices is a testament to continued underlying local demand amid resilient economic conditions. Buyers remain price takers, as owners are in no hurry to sell due to limited supply in land-scarce Singapore."
Leedon Green scale model - EDGEPROP SINGAPORE
Leedon Green sold 57 units at a median price of $2,957 psf in 1Q2023 (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Narrowing price gap drives transactions in CCR

Non-landed property prices rose 2.6% q-o-q, accelerating from the 0.3% q-o-q rise in 4Q2022. The city fringe or Rest of Central Region (RCR) led the way, with price gains of 4.4% q-o-q. Homes in the suburbs or Outside Central Region (OCR) were up by 1.9% q-o-q, while homes in the prime Core Central Region (CCR) increased by 0.8%.
According to Edmund Tie's Lam, the CCR commands the highest take-up rate (3.7%) and forms the bulk of completed and unsold units (165 units) in 1Q2023. He adds that there was a dearth of new project launches in the CCR last quarter. Homebuyers saw value in buying homes in this segment, especially with the narrowing price gap between CCR and RCR.
Ongoing CCR projects that helped boost transactions in the prime market included the 638-unit Leedon Green, the 340-unit Pullman Residences Newton, 230-unit Perfect Ten, 360-unit Hyll on Holland and 138-unit Klimt Cairnhill. "The CCR led new home sales in 1Q2023 despite the lack of fresh project launches," says Chia Siew Chuin, JLL Singapore head of residential research. During the quarter, 541 new units were sold in the CCR, 43.1% of total new homes, representing a 42% increase q-o-q and 49.9% -o-y.

Share of sub-sales rose 11.7% in the RCR

The share of sub-sale transactions in the RCR rose 11.7% in 1Q2023, compared to 10.4% the previous quarter: "It coincided with the increase in prices in the RCR, as sellers took the opportunity to cash out their properties at higher price quantum," says Lam Chern Woon, head of research & consultancy at Edmund Tie. "However, the increase in the share of sub-sale transactions in the RCR may warrant closer watching as it could point towards a higher level of distressed selling."
Developers are estimated to have sold 1,256 units in 1Q2023 against 1,312 launched units, says Lee Sze Teck, senior director of research, Huttons Asia. Hence, 1Q2023 developers' sales are 82% higher than 4Q2022's 690 units.
The first three months of 2023 saw two non-landed project launches. The 268-unit Sceneca Residence in Tanah Merah in the OCR kicked off new project launches this year, with first-day sales of 160 units (60%) in January. The median price achieved was $2,084 psf as of end-March 2023.
Don't miss out to check out the hottest new launch condo and new landed property in Singapore
Sceneca Residence crowd - EDGEPROP SINGAPORE
The crowd at the preview of the 268-unit Sceneca Residence in Tanah Merah on January 1 (Photo: MCC Singapore)
In February, the freehold, Terra Hill along Yew Siang Road, off Pasir Panjang Road, in the RCR sold almost 40% of its units on launch day. The median price of units sold was $2,695 psf as of 1Q 2023.
The 386-unit, The Botany at Dairy Farm in the OCR, was launched in March and sold almost 50% at a median price of $2,067 psf.
Huttons’ Lee sees the strong sales in 2023's new project launches as a sign of the strong desire to invest in property. Unsold units in the market remained low at 16,464 units. "There is broad-based support for prices in the market, giving buyers the confidence to enter," he adds.
Buyers continued to search for more affordable options in the resale market, pushing the overall transaction volume to 2,622 units in 1Q2023. The high interest and mortgage rates have pushed resales volume to 2.7% lower than in 4Q2022. Prices in the RCR increased by 4.4% due to the return of higher demand from both local and foreign investors, according to Lee.
The Botany at Dairy Farm scale model - EDGEPROP SINGAPORE
The 386-unit, The Botany at Dairy Farm in the OCR, was launched in March and sold almost 50% at a median price of $2,067 psf (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Resale volume and prices

Source: Huttons Asia, URA data

Prime purchases, rents

Foreign private residential property prices increased 14.2% in 1Q2023 to 258 units from 226 in 4Q2022. "Some could be relocating to a safe haven like Singapore due to geopolitical tensions," says Lee. Such buyers purchased newly completed, freehold projects in the prime district 10, such as Allgreen Properties' 285-unit Royalgreen (average price $2,752 psf) and the 115-unit Juniper Hill (average $2,839 psf) in the prime Bukit Timah neighbourhood as well as the 55-unit Petit Jervois (average $2,723 psf) in the Jervois Road neighbourhood, off River Valley Road.
Foreigners made up 6.9% of total private residential transactions in 1Q2023, similar to the proportion in 4Q2022. The top five nationalities are China, Malaysia, India, the US and Indonesia.
To date, 40.7% of the transactions in 2022 are below $1.5 million, 25% are between $1.5 million to $2 million, and 34.3% are above $2 million. In 1Q2023, Singaporeans made up 72.3% of residential property purchases, followed by Permanent Residents (20.2%) and foreigners (6.9%).
The red-hot private residential rental market saw gains ease for two straight quarters to 7.2% in 1Q2023, says Huttons' Lee. These gains were driven by the landed segment, up 14.5% q-o-q. Notable rental deals include a Good Class Bungalow on Astrid Hill for a monthly rate of $170,000 and a 6,100-6,200 sq ft, four-bedroom unit at The Marq on Paterson Hill for $100,000 a month. "These deals were probably by UHNWIs [ultra-high-networth individuals] who are awaiting the approval of their permanent residency application before buying their first home in Singapore," reckons Huttons' Lee.
While the CCR recorded the highest rental growth of 6.4% q-o-q, RCR and OCR rents rose 6.2% and 6.1%, respectively, notes Cushman & Wakefield's Wong.
The Marq on Paterson Hill - EDGEPROP SINGAPORE
A 6,100-6,200 sq ft, four-bedroom unit at The Marq on Paterson Hill was rented out for $100,000 a month in February (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Projects in the OCR and RCR to proceed

In the executive condo (EC) segment, 206 new units were sold in 1Q2023, according to Huttons Research. Only 419 unsold units remain as of end-1Q2023. The next EC project to be launched will be the 360-unit Altura by Qingjian Realty, located along Bukit Batok West Avenue 8.
Developers with mass market projects in the OCR and city fringe projects in the RCR are going ahead with their launches, as the buyers are predominantly Singaporeans and PRs. These include the 275-unit Blossoms By The Park at Slim Barracks Rise in one-north, launched today [April 29] and the 816-unit The Continuum at Thiam Siew Avenue in District 15, which will launch next weekend on May 6.
Those with high-end projects in the CCR segment will likely hold back their launches for now, as we have seen at the 246-unit Newport Residences in Tanjong Pagar.
The Continuum scale model - EDGEPROP SINGAPORE
The 816-unit The Continuum at Thiam Siew Avenue in District 15, will launch next weekend on May 6 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Singapore's economy slowed to 0.1% y-o-y in 1Q2023, much lower than the 2.1% y-o-y growth in the previous quarter, says Huttons' Lee. "The slower economic growth is unlikely to impact the property market due to the low inventory of unsold units and healthy liquidity," he adds. As of 1Q2023, the number of unsold units is 16,464 units, about 11,303 units below the 10-year average of 27,767 unsold units.
"However, the fresh set of cooling measures announced on April 26, 2023, targeted at foreigners might result in a knee-jerk reaction in the short term," notes Lee. He expects demand to ease in the next three months. "Buyers will reassess their finances before deciding on a property purchase."

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