Resale private housing market rebounds 13.8% q-o-q in 2Q2023, buoyed by narrowing price gap with HDB resales: Savills

The number of private residential units sold in the resale market in 2Q2023 jumped 13.8% q-o-q to 3,261 units, based on a research note published by Savills Singapore. Although this ends a consecutive three-quarter decline in the private resale market, the market is down 26.1% on a yearly basis.

The improvement in the resale market last quarter was sustained by better sales in the Rest of Central Region (RCR), which saw a 24.7% increase in sales volume, and in the Outside Central Region (OCR), which recorded a 12.8% increase in sales volume. Sales in the Core Central Region (CCR) remained unchanged from the previous quarter.

According to Alan Cheong, executive director of Savills Research and Consultancy, the increase in the secondary market could have been the result of rising HDB prices over the past few quarters which have narrowed the gap between private resale prices.

Moreover, last quarter also saw a 22.6% decline in the number of non-landed homes purchased by foreigners to just 205 units in 2Q2023. This is the lowest figure since 1Q2022 when foreign buyers snapped up 145 units at the time. “This was a result of the raising of the additional buyer's stamp duty [ABSD] for foreign buyers in late April,” says Cheong.

Savills noted that a basket of luxury non-landed private residential projects it is tracking saw a slowdown in the rate of increase in prices. Prices of non-landed luxury homes in this basket saw a meagre 0.4% q-o-q increase in 2Q2023 to about $2,591 psf.

“Following a dampening foreign demand in luxury homes due to higher ABSD rates, one of the main demand drivers of luxury homes has decreased, which may have led to the slowing of price increase for such properties,” says Cheong.

Looking ahead, he points out that there are not many large-sized new project launches (above 500 units) slated for release over the next few quarters.

“We maintain our forecast for private residential property prices to rise 7% in 2023,” says Cheong. “However, given the challenges facing the economy, at a new baseline of $2,000 psf in the OCR and $2,400 psf for the RCR, first weekend sales for private non-landed residential launches may hover in the 25% to 35% range from 3Q2023 to the first half of 2024."