SINGAPORE (EDGEPROP) - Private residential property prices grew by 0.2% q-o-q in 4Q2022, according to flash estimates released by URA on Jan 3. This marks a slowdown from the 3.8% increase recorded the previous quarter and brings total price growth for the whole of 2022 to 8.4%, easing from the 10.6% growth logged in 2021.

The slower price growth comes on the back of a decline in private housing sales. Sale transaction volume fell in 4Q2022 by about 49% q-o-q and about 60% y-o-y. For the whole of 2022, sale transaction volume fell by 36% y-o-y.

The lower sales volume in 4Q2022 is in line with the absence of major private residential launches, says Lee Sze Teck, senior director of research at Huttons Asia. “An estimated 500 to 600 units were launched for sale in 4Q2022 – the lowest quarterly launch volume since 1Q2003 when only 506 units were launched for sale,” he notes. On a full-year basis, an estimated 4,500 to 4,600 units were launched in 2022, which is less than half of 2021’s launch volume of 10,496 units.

Nicholas Mak, head of research and consultancy at ERA Realty Network, adds that the lower transaction volume follows a dimmer macroeconomic outlook amid interest rate hikes and inflationary pressures, as well as new property cooling measures that may have impacted home buyers' decision-making.

Private housing price growth in 4Q2022 was predominantly driven by landed properties, which saw prices rise 0.5% q-o-q – moderating from the 1.6% price growth recorded for the landed segment in the previous quarter. For the whole of 2022, the landed segment posted a price increase of 9.5%, easing from the 13.3% increase in 2021.

Non-landed properties registered a price growth of 0.1% q-o-q in 4Q2022, slowing from the 4.4% increase achieved in 3Q2022. This brings full-year price growth for non-landed properties to 8%, lower than the 9.8% increase in 2021.

Properties in the Rest of Central Region (RCR) outperformed the other regions, rising 2.6% q-o-q, following a 2.8% increase recorded in 3Q2022. Tricia Song, head of research, Southeast Asia at CBRE, observes that the RCR price increase is largely attributable to high unit pricing at existing projects, namely the 455-unit Rivière and the 774-unit One Pearl Bank. Forty units at Rivière were transacted in 4Q2022 at a median price of $2,998 psf, while 25 units were transacted at One Pearl Bank with a median price of $2,569 psf.

For the whole of 2022, RCR prices rose 9.2%, moderating from the 16.3% surge registered in 2021.

In the Core Central Region (CCR), private housing prices grew 0.5% q-o-q in 4Q2022, easing from the 2.3% growth in the previous quarter. This brings full-year price growth in the CCR to 4.6%, improving from the 3.8% logged in 2021.

Meanwhile, private housing prices in the Outside Central Region (OCR) saw a 2.6% q-o-q contraction in 4Q2022, reversing from the 7.5% surge recorded the previous quarter. Ismail Gafoor, CEO of PropNex Realty, attributes the OCR performance to a high base in 3Q2022 coming off major launches including Amo Residence, Sky Eden@Bedok and Lentor Modern. Despite the contraction, the OCR is the best-performing region for the whole of 2022 with prices increasing 9.3%, higher than the 8.8% growth registered in 2021.

In the coming months, a tight supply of new private homes will continue to support the market even as headwinds dim Singapore’s economic outlook. “The market could surprise on the upside in 1Q2023, as developers push out new launches catering to resilient buying demand amidst still-low levels of unsold inventory,” opines Wong Xian Yang, Cushman & Wakefield’s head of research, Singapore.

Leonard Tay, Knight Frank Singapore’s head of research, concurs, noting that launches characterised by “good property attributes at the correct price-points” will continue to see strong demand. Nonetheless, the weaker economic outlook and higher borrowing costs are expected to temper price growth, with Tay projecting a more moderate 5% to 7% increase for the whole of 2023.

Read also: Narrowing price gap between CCR and RCR properties

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