Singapore. Private home prices rose at a slower pace in the last quarter of 2022 (0.4%) amid lower sales due to cooling measures, a lack of major launches, weaker economic projections, and rising interest rates, according to real estate statistics by the Urban Redevelopment Authority.
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Last year, private home prices increased 8.6%, slowing from 10.6% in 2021.
The price decline happened amid global trends. A similar pattern can be observed in other countries, according to OrangeTee & Tie’s senior vice president of research and analytics Christine Sun.
“Real estate will inevitably be affected as households tighten their belts, and rising interest rates hold back some potential buyers,” she said.
“It is not surprising that some buyers in Singapore are starting to feel the impact of higher mortgage payments, considering how much interest rates have risen over the past year. However, most buyers can still service their loans now as they are not overleveraged since stringent property curbs are in place to ensure buyers remain prudent and our job growth is still healthy,” Sun added.
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On 30 September, the government introduced various property cooling measures, including a 15-month wait-out period for private homeowners who want to sell their property before submitting an application to buy an HDB resale flat.
Lee Sze Teck, senior director of research at Huttons Asia, also stated that price growth was affected in the last quarter of last year because there were no major non-landed launches.
Moreover, sales volume dipped as more buyers went on vacation overseas, and sales activity experienced a slowdown on seasonal holidays.
In Q422, 3,588 units were sold, compared to 6,148 in Q322.
This is the lowest developers’ sales since the Global Financial Crisis in 2008, according to Lee. Despite this, it’s still a strong number considering developers launched limited units in 2022.
In 2023 and 2023, around 32,100 units are expected to be completed. This figure already includes ECs. This is twice the number of units completed in 2021 and 2022 at 15,900.
“This will help to cater to housing needs in the immediate term,” URA shared.
“More supply with planning approval, totaling around 19,600 units as of the fourth quarter of 2022, will be completed beyond 2024.”
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