Private home prices in Singapore rose by 8.4 per cent in 2022, compared with the 10.6 per cent increase in 2021, according to flash estimates released by the Urban Redevelopment Authority (URA) on Tuesday (Jan 3).
The moderation in price increase came on the back of a decline in private housing sales, with total sales falling by about 36 per cent last year, said URA.
Overall, the private residential property index increased to 188.2 points in the fourth quarter of last year, a 0.2 per cent rise from the previous month.
The number of sales in the last quarter of 2022 fell by about 49 per cent on a quarter-on-quarter basis and by about 60 per cent on a year-on-year basis.
Christine Sun, senior vice president of research and analytics at OrangeTee and Tie said: “The price softening is in line with a weaker macroeconomic projection against a backdrop of rising mortgage rates and spiralling inflation.”
Singapore introduced property cooling measures in December 2021 and September last year to dampen demand.
In the fourth quarter of last year, prices of non-landed private residential properties in the Core Central Region (CCR) rose 0.5 per cent, compared with the 2.3 per cent increase in the preceding quarter.
Prices in the Rest of Central Region (RCR) increased by 2.6 per cent, while prices in the Outside Central region decreased by 2.6 per cent.
For the whole of 2022, prices in the CCR, RCR and OCR increased by 4.6 per cent, 9.2 per cent and 9.3 per cent respectively.
The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers until mid-December. The statistics will be updated on Jan 27.
Lee Sze Teck, senior director of research at Huttons Asia, said there were fewer sales in the last quarter of 2022 as there were no major private residential launches.
Prices for units in the OCR fell as demand in this segment is more sensitive to interest rates and Housing Board (HDB) upgraders, he added.
“The higher interest rate is affecting the demand from price sensitive buyers as their ability to borrow is crimped,” CAN quoted him saying.
Sun said that sales slowed dramatically during the year-end as many people rushed to travel overseas.
“Developers held back launches during the holiday season, resulting in fewer new homes sold last quarter,” she added.
Outlook 2023
Sun said she expects buyers to stay prudent this year, given the rising interest rates, inflationary pressures and global economic uncertainties.
She added that the net effect may see prices growing slower, between 5 per cent and 8 per cent this year.
More private homes will be launched in prime locations and city fringe areas this year, and sales of such pricier homes may uplift the overall price index, she said.
Lee added that the supply of new homes is estimated to be between 10,000 units and 12,000 units this year, spread over 40 launches.
“Interest rate is expected to peak in 2023. It is unlikely to affect demand for new launches as the drawdown on loan is on a progressive basis,” he said.
“However higher interest rates may weigh on the resale market. Higher construction costs and low unsold supply in the market may add upward pressure by up to 5 per cent in 2023.”
