Singapore private home rents and prices rose by 0.8% during Q3 to show signs of stabilisation

URA’s rental index for private residences grew 29.7 percent last year. It had risen 9.9 percent in 2021. Rents soared last year due to an abrupt drop in completions of homes as a result

Covid’s construction delays and supply-chain interruptions worldwide.

URA statistics show that at the end-Q3 of 2022, private home vacancies rose to 8,4 per cent from 6,3 per cent Q2 and 5,7 per cent Q3 2018.

A slower rate of growth in the Q3 2023 rental index coincided with a surge in private housing completed units during the third quarter, which grew to 8,517. The total units for the first 9 months now stands at 15,883.

With another 3,167 units of private housing to be completed in Q4-2023, it is anticipated that the annual figure will reach 19,050. This would mark the highest number since 2016, where 20,803 residential homes were built.

According to expected completion date reported by the developers to the government, there will be 9,875 new private homes ready next year.

Mak continued: “As private housing and public housing are built more in the months to come, it is possible that local residents renting their accommodations while waiting on their new homes will not renew their leases.”

This drop of 3.5 percent in the number of homes sold in Q3-2023, from 5,388 to 5,201 is another indication of the stabilisation of the market. Developer sales were down, as was the resale sector. But sub-sales rose in volume to 355 units from just 285 units during Q2 2023.

Nicholas Mak (chief research officer at expects the amount of private homes sold this year in the primary market and the secondary to be lower, between 18000 to 19300 units.

He attributes it to “increasing headwinds in the housing market for the coming months, including a weakening rent market, an increase of unsold stocks, high borrowing rates and economic uncertainties”.

URA’s private home rental index increased 0.8% in the third quarter of this year. In Q3, URA’s overall rental index for private homes rose by 0.8 per cent quarter on quarter.

Over the course of a year, there has been a 19.3% increase in this index.

URA has highlighted the fact that rentals have been declining for the past four successive quarters. Q3 2020 saw the largest increase in rental rates since the third quarter of 2010.

Tay at Knight Frank has predicted that in the next three quarters, rental trends will range between minus 1-percent and plus-1%.

Cushman & Wakefield research analyst for Singapore and South-east Asia Wong Xian Yang stated: “Overall home sales volume have been tempered because buyers are becoming increasingly price-sensitive. This is due to a number of factors like elevated financing rates, a selection of options that will be launched in the future, cooling measures recently implemented, and economic uncertainties. Others are holding out in hope for lower prices.

Tricia Songs, CBRE’s Head of Research for Singapore and South-east Asia, stated that private residential launch take-up is lower than the previous year due to buyer resistance and fatigue.

URA data revealed that 2,805 residential unfinished units were launched for sale by developers in Q3, an increase from 2,374 the previous quarter. In Q3, however, they only sold 1,946 private residences compared to 2,127 homes in Q2.

Likewise, the 2,900 units of resale in Q3 was also 2,6% below the 2,976 unit in the preceding quarter. A tad more than 55.2 percent of Q3’s total sales came from resale transactions.

CBRE Song is also expecting rents to be easing in the next few months. Mak estimates that URA’s rental index will still grow this year by 11% to 13%. In 2024 the index could begin to drop and have a year-long decline of between 6-12%.

“The market is becoming one of tenants,” said he.

CBRE Song added: “Expatriate demands could also moderate, as firms restructure, and make cuts in hiring, amid the challenging economic climate.”

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Singapore’s latest data for private housing in the third quarter shows that prices are stabilising. This is due to high interest rate, cooling measures, and cautious economic attitudes reducing demand.

On the leasing markets, a balance between demand and supply is beginning to appear, albeit with a continued slowdown in rent growth. This comes amid an increase in house completions especially this quarter.

This view is gaining ground amongst market observers, despite a 0.8% quarter-on-quarter increase in URA’s overall private home prices index for Q3 of 2023. This is a larger gain than

URA’s latest flash estimate, released Oct 2. It contrasts with the decline of 0.2% in the 2nd quarter 2023 quarter over quarter after the new property cooling measures.

In comparison to a previous year, the benchmark has increased by 4.4%. The current macro-economic climate and geopolitical uncertainty may make this seem out of place.

Knight Frank Singapore’s Leonard Tay explained that, to put it in context, the URA’s private home prices index is up by 3.9 percent over Q4-2022. In 2023, we are predicting a rise of 4+% for the entire year. After the price increases of 8.6% in 2020 and 10.6% in 2021, this would represent a major slowdown.

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