_Investment Market Update Q1 2023

Key Highlights

• The first quarter of 2023 was off to a slow start with a total of just S$4.2 billion of investment sales, a decrease of 61.0% y-o-y compared to the total of S$10.8 billion in Q1 2022.
• Despite the current wait and see posture of investors, Singapore continues to appeal as a haven for investment, due to the safe and stable political and economic environment amid the escalating global uncertainty. During the quarter, residential deals amounted to S$1.6 billion, comprising collective sales that amounted to some S$583.8 million.
• At the same time, there was also interest from buyers and investors for freehold properties in prime locations in the Core Central Region (CCR) in Q1 2023, with wealth and capital preservation for succession planning in view. For Singapore buyers and investors, income generation was also a priority as 32% of wealthy survey respondents in The Wealth Report 2023 stated this as their chief goal in 2023.
• Overall, the momentum of investment deals slowed in Q1 2023, registering the lowest quarterly total since Q2 2020 when Singapore imposed the circuit breaker in the early days of the pandemic.
• The enbloc environment remains challenging with a seeming gulf in sellers’ and developers’ price expectations. Although developers are still hungry for land, the current collective sales cycle of 2021/2023 presently only has a success rate of around 33% compared to the 63% during the cycle of 2017/2018.
• Notwithstanding the challenges, more new launches and relaunches are expected for the rest of 2023 with the East Region being a popular choice. Despite the cautious domestic mood, outbound investment from Singapore was active in Q1 2023, with a total of S$19.3 billion according to Real Capital Analytics (RCA).
• On the heels of the collapse of SVB and the takeover of the Credit Suisse Group by the UBS Group in March 2023, the pace of investment activity in Singapore is expected to get worse before it gets better. Financing has become more challenging for buyers, investors, developers and banks, and will remain so until there are visible signs of the global economy and financial conditions stabilising.