_Residential Market Update Q1 2023

Key Highlights

• Sales activity in the non-landed residential market started slowly in the new year, with 3,665 sales recorded in Q1 2023*, 21.9% down from the 4,691 sales recorded in Q1 2022*, as a tentative mood prevailed among homebuyers wary of increased borrowing costs amid economic turbulence.
• In the primary sales market, although new sales rose 89.5% q-o-q to 1,245 transactions in Q1 2023*, this was 27.2% lower than the 1,709 new sales transacted in Q1 2022*.
• The new year galvanised some developers into launching new projects, with hopes that revenge travel was done and that prospective homebuyers were back on the lookout for new product in Singapore’s currently under supplied private home market. Sales in the secondary market declined 7.0% q-o-q to 2,420 sales recorded in Q1 2023*, and an 18.8% y-o-y drop when compared against the 2,982 resale transactions in Q1 2022*.
• Despite transaction activities moderating with the increasingly cautious climate, home prices continued to climb, albeit in a less aggressive and more restrained fashion. According to flash estimates by the Urban Redevelopment Authority (URA), prices of non-landed private homes (excluding Executive Condominiums (ECs)) rose 2.5% q-o-q and 11.2% y-o-y in Q1 2023** due to new benchmark prices set by new launches.
• Islandwide leasing contracts for non-landed private homes totalled 12,381 in January and February 2023, a decrease of 2.6% when compared to October and November 2022, and 13.2% lower than the same period in 2022. While rental volume shrank, demand pressure remained bullish resulting in rents increasing between 9% and 12% q-o-q across the different segments.
• In a time of inflation, increasing borrowing costs and an uncertain economy, price sensitive homebuyers, especially in the mass market segment, would turn cautious and might direct their financial resources towards household expenses. At the other end of the housing spectrum, the demand for prime non-landed residences would remain strong as luxury homebuyers, who are less dependent on debt financing, are more willing to pay for readily available family-sized units for their own occupation or for their children studying in Singapore.

*based on data available as at 12 April 2023. Figures exclude Executive Condominiums (ECs).

**based on flash estimates announced on 3 April 2023.