_URA Real Estate Stats - Q2 2023
Residential
The percentage decline in the URA All Residential Price Index of 0.4% q-o-q announced during the flash estimates (on 3 July 2023) and the 0.2% q-o-q decrease (today) in the data almost four weeks later showed that the take up at the new launches in the intervening weeks created some upward support, as demand from local homebuyers remained firm. In the Core Central Region (CCR), prices moved into negative territory with a fall of 0.1% q-o-q, from the earlier flash estimate of 0.3% q-o-q increase, suggesting that the Additional Buyer’s Stamp Duty (ABSD) rate increase for foreigners made an impact during the quarter, and in the last four weeks. It is likely that some developers, especially of projects in the CCR that are completing soon or approaching the five-year ABSD deadline, might have eased prices moderately to spur transaction activity among locals.
With the possibility of a technical recession looming in the minds of homebuyers, private home prices are expected to stabilise with increases being more subdued. While potential investors and foreign buyers might adopt a wait-and-see attitude, new units will likely be more sought after than resale units, selling at prices that reflect the land costs committed 12-18 months ago, as well as heightened construction costs. With overall private residential prices increasing about 3.1% in the first half of 2023, this is on track to fall within Knight Frank’s projection of a more muted 3% to 5% increase for the whole of the year.
The URA rental index for private homes increased by 2.8% q-o-q in Q2 2023 culminating in a 10.2% for the first six months of the year. As more new homes complete in 2023 against the prevailing uncertain economic environment, the leasing market has started to cool and will continue to do so in the remainder of 2023.
Related Reading
URA Real Estate Stats - Q4 2023
Commentary: Land Betterment Charge Rates from 1 September 2023