26th January – 30th January 2023
Private home prices rose at a slower pace in Q4 2022, rising 0.4% compared to the 3.8% hike in Q3 2022. Meanwhile, HDB resale prices logged their slowest quarterly growth for 2022, at 2.3% in Q4 2022.
1) Private home price growth slows to 0.4% in Q4 2022
Prices of private residential properties in Singapore grew at a slower pace in the fourth quarter of 2022, rising 0.4% compared with the 3.8% hike registered in Q3 2022, showed Urban Redevelopment Authority (URA) data.
For the whole of 2022, private home prices rose 8.6%, moderating from the 10.6% increase seen in 2021.
PropNex Realty CEO Ismail Gafoor attributed the easing of prices to a combination of the cooling measures in September, lack of new launches, depleting unsold inventory as well as the year-end market lull.
In Q4 2022, developers sold 690 private homes, excluding executive condominiums (ECs), down 68.4% from 2,187 transacted in the previous quarter. The figure is the lowest quarterly sales posted since Q4 2008 when 419 units were shifted.
For the entire year, developers moved 7,099 private homes, compared with the 13,027 units in 2021.
Looking ahead, Gafoor expects overall private home prices to increase 5% to 6% this year, easing from the 8.6% hike posted in 2022.
“We are not projecting any downward correction in prices at this juncture in view of the pent-up demand as well as the high land cost and rising construction cost faced by developers,” he said.
2) HDB resale prices rise 2.3% in Q4, the slowest growth in 2022
Prices of resale Housing and Development Board (HDB) flats rose 2.3% during the fourth quarter of 2022, compared with 2.6% in the third quarter, showed HDB data.
HDB noted that this was also the slowest quarterly growth in 2022.
For the whole of 2022, resale prices also rose at a slower pace of 10.4% versus 12.7% in 2021.
Analysts said price growth moderated due to higher interest rates, price resistance and cooling measures.
“The higher borrowing costs are eating into buyers’ budget and buyers are also baulking at the prospect of paying cash over valuation given that economic conditions have turned cloudy in 2H 2022,” said Huttons Asia.
Meanwhile, resale transactions fell 12.6% quarter-on-quarter and 16.9% year-on-year to 6,597 in Q4 2022.
For the whole of 2022, resale transactions dropped 10.1% to 27,896 from 31,017 in 2021.
Looking ahead, PropNex Realty Head of Research and Content Wong Siew Ying expects HDB resale price growth to slow between 6% and 8% this year.
3) Private home rents surge 29.7% in 2022, the highest increase in 15 years
Rents for private housing in Singapore jumped 29.7% in 2022, its highest annual hike since 2007, when rents soared 41.2%, reported TODAY.
Huttons Asia Senior Director of Research Lee Sze Teck attributed the increase in rents to various factors, including the delay in the completion of new homes, continuing hybrid work arrangements and the return of foreign students.
The cooling measures rolled out by the Government in September 2022 may have also led former private property owners to rent while serving their 15-month wait-out period before they could acquire an HDB resale flat.
Looking ahead, OrangeTee Senior Vice-president of Research and Analytics Christine Sun, expects rents for private homes to continue to increase – although not as much as last year – at 13% to 16% this year.
She explained that the downward pressure on rents will be partly due to the ramped-up housing supply – with about 19,291 new private housing units, including executive condominiums (ECs), set for completion.
4) 55% of BTO projects delayed by the pandemic were completed in the last two years
Over the last two years, HDB completed 52 Build-To-Order (BTO) projects or about 55% of the projects delayed by the COVID-19 pandemic, reported CNA.
“This project completion rate exceeds the pre-COVID norms and is in fact the highest for HDB in the past five years,” said HDB CEO Tan Meng Dui, adding that the agency will continue to minimise project delays over the next two years.
In an update released on 28 January 2023, HDB shared that the proportion of delayed BTO projects has been reduced from over 90% in 2021 to about 40% of current ongoing projects.
Among the delayed projects that were completed include Northshore Edge in Punggol as well as three projects which were affected when their contractor ran into financial difficulties – namely, Senia Heights, Senia Ridges and Sky Vista @ Bukit Batok.
5) Former school site earmarked for high-rise residential development
A former school site in Toa Payoh has been rezoned from educational to residential use, reported The Straits Times.
In a proposed amendment to the URA master plan, the site – which is about 1.7ha – was assigned a plot ratio of 5.0.
URA said it will house a “high-density residential development”, adding that future residents will benefit from the proximity of the site to existing transport nodes.
Located at the intersection of Braddel Rise and Toa Payoh, the site was previously partially occupied by First Toa Payoh Primary School before it moved to Lorong 8 Toa Payoh following a merger in 2002.
Analysts expect the site to yield over 850 housing units, depending on whether it is used for a condominium or Housing Board flats.
Nicholas Mak, Head of Research and Consultancy at ERA Realty, said the site is located near Caldecott MRT station and Braddell MRT station, making it attractive to home buyers and developers.
6) Homeowners face a double whammy of increasing mortgage rates, higher home prices
Deputy Prime Minister Heng Swee Keat has highlighted the challenge facing homeowners of having to contend with a double whammy of rising mortgage rates and higher home prices, despite two rounds of property cooling measures.
The Straits Times reported that the minister warned of a need to guard against a sustained hike in prices which is not backed by income and fundamentals, pointing that property prices remained buoyant even amidst global uncertainties and greater supply.
And with borrowers facing higher monthly home loan repayments, Heng said there is also a need to pay attention to the significant hikes in mortgage interest rates.
For instance, the three-month SORA – which is a widely used benchmark for floating mortgage rates – has increased from 0.2% to 3% in the past year and could further increase over the coming months before stabilising, he said.
The minister made the statement at the annual spring festival celebration of the Real Estate Developers’ Association of Singapore (REDAS).
7) Government to continue to monitor home prices, borrowing
Deputy Prime Minister Heng Swee Keat said the government will continue to monitor home prices and borrowing even as property price growth and sales volume have moderated over the last quarter, reported The Business Times.
Speaking at REHDA’s annual spring festival celebration, the minister described homeownership as a “key tenet of our social compact” since 80% of Singaporeans live on their own HDB flats.
“Our commitment is for all Singaporean families to own a roof over their heads, but we must enable them to do so in a financially sound and sustainable way,” he said.
During his speech, the minister also highlighted the need for innovation in the built environment sector to raise productivity and for greater sustainability.
“There is a critical need to pivot to a much-greener environment, which today accounts for 40% of annual global CO2 emissions,” said Heng.
8) Shophouse sales fall 35.6% in 2H 2022
Singapore saw shophouse sales decline 35.6% to about $625.2 million in the second half of 2022 from the first half of the same year as the recent surge in interest rates dampened demand, revealed Knight Frank.
On an annual basis, shophouse sales dropped 38.7%.
Knight Frank said this is “a stark contrast from the record-breaking performance reported every six months between 1H 2021 and 1H 2022”.
In terms of sales volume, the shophouse market registered 67 transactions in 2H 2022, with freehold shophouses accounting for 80.6% or 54 units.
For the whole of 2022, a total of 187 shophouses changed hands with a combined sales value of $1.6 billion.
“As interest rates surpassed the yield from recurring shophouse income, institutional investors began to shy away from the asset class. However, this leaves the road open to private wealth that is not as dependent on debt financing,” said Knight Frank.
“Family offices and individuals are expected to form the bulk of the purchasers, acquiring in strategic locations, adding value through refurbishment, changing up the tenancy types to trendy occupiers, and increasing rents, as private capital investors believe in the long-term forward-looking appreciation of shophouses in affluent Singapore,” it added.
9) Six shophouses in Serangoon Road sold for $62.5mil
A portfolio of six freehold shophouses located at 322 to 332 Serangoon Road has been sold for $62.5 million, revealed marketing agent PropNex Realty.
This works out to $2,304 per sq ft per plot ratio (psf ppr) based on the potential gross floor area (GFA) of 27,125 sq ft.
PropNex noted that the adjoining shophouses occupy a site that is zoned for commercial use under the 2019 Master Plan with a gross plot ratio of 3.0.
The site can be redeveloped into a six-storey commercial building with a GFA of 27,125 sq ft.
Given the site’s commercial zoning, the buyer need not pay Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD).
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Farhan Shafie, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: firstname.lastname@example.org.