Singapore Private Home Prices Jump 3.2% in Q1, Up 28% Since 2020

Singapore private housing prices rose for a 12th straight quarter during the period from January through March, with the cost of buying a new home jumping 3.2 percent from the final months of 2022, according to preliminary government statistics released on Monday.

The rise in prices for private condominiums and landed homes in Singapore accelerated from the 0.4 percent uptick recorded in the fourth quarter of 2022  the Urban Redevelopment Authority reported, with costs for landed homes, the most expensive housing in the city, leading the upswing with a 5.7 percent increase in prices from the preceding period.

With home costs having now risen for each quarter over the last three years, new private housing in Southeast Asia’s wealthiest nation is now 27.9 percent more expensive than it was at this time in 2020, with the URA’s price index for the most recent three months up 11.3 percent from the same period a year ago.

Despite the upswing, analysts cautioned that more projects are set to launch during the coming months with the increase in supply predicted to temper future price increases.

Short Supply

The URA noted that private home sale transaction volume for the quarter was down by about 8 percent from the preceding three months and fell by 38 percent from a year earlier, with analysts pointing out that the reduction in deal flow made it possible for performance at a small number of projects to distort the market picture.

“Colliers Research is of the view that this strong price growth is not representative of the entire market, but skewed by a few projects,” said Catherine He, head of research for Colliers in Singapore. “Buyers should exercise caution and financial prudence in light of the elevated interest rate environment going forward, as well as the deluge of supply and project completions coming onto the market.”

He said the jump in prices was driven in part by the successful launches of a few luxury projects including Terra Hill in Pasir Panjang, where prices helped set a new benchmark for locations at the fringe of the urban fringe in February as they reached as high as S$2,699 per square foot.

The decrease in home sales volume came after developers launched just 4,528 private residential properties for sale last year, compared with 10,496 units in 2021, according to URA figures, with the shortage in supply leading to strong demand at the few projects made available each quarter.

Prices for private condos, which exclude Singapore’s hybrid public-private executive condo segment rose by 2.5 percent during the first quarter of this year, compared to the 0.3 percent increase tallied in the preceding three months.

Fringes Rise

Prices for homes in urban fringe areas officially referred to as the Rest of Central Region (RCR) rose by 4 percent during the quarter, to lead all locations in the Lion City. That growth was up from the 3.1 percent increase recorded during the preceding three months, at least in part due to the high rates fetched at the Terra Hill condo complex. Buyers scooped up more than one-third of that project’s 270 units during its launch weekend in late February.

Condo prices in suburban locations known as the Outside the Central Region (OCR) rose by 1.9 percent in the first quarter after falling by 2.6 percent in the preceding three months. Those suburban price increases were driven by another hot-selling project, MCC Land’s Sceneca Residence in Tenah Mera, which set a new OCR benchmark rate of S$2,083 per square foot when it launched in January, according to Colliers.

Housing price growth was the softest in the downtown districts grouped under the Core Central Region, where rates rose by 1 percent in the first quarter after an increase of 0.7 percent in the fourth quarter. In terms of volume, the city centre was the only region to post higher year-on-year sales during the first quarter.

Growth Expected to Slow

Ismail Gafoor, chief executive of PropNex Realty, said the “surprising” first quarter figures have prompted the firm to raise its projections for full-year home price growth rate to 6 to 8 percent from an initial prediction of a not more than 6 percent increase.

Chern Woon Lam, research and consulting head at Edmund Tie, said the first quarter market data attests to the robust demand for new homes in Singapore but cautioned that heightened market uncertainties and the volume of new projects slated to launch in the coming months may temper growth.

Among the imminent launches noted by analysts are a pair of projects in the upscale District 15 area, the 638-unit Tembusu Grand condo by City Developments Ltd and MCL Land, as well as the 807-unit The Continuum project being built by Hoi Hup Realty and Sunway Development.

During this month the launch of the Lentor Hills Residences in Ang Mo Kio will bring 598 new homes into the market, while the 740-unit Reserve Residences development in Bukit Timah is expected to begin previews in May.

“Given that numerous projects are expected to be launched this year, buyers can afford to wait for the right product and location that best suits their needs and budget,” Edmunt Tie’s Lam said.