URA’s Q2 2023 report indicates slowdown in private housing price and rental momentum in Singapore

SINGAPORE: The Singapore Urban Redevelopment Authority (URA) released its real estate statistics for Q2 2023 today, revealing a slowdown in price and rental momentum in the private housing market.

The overall private housing prices saw a slight decline in the second quarter for the first time since Q1 2020. This is attributed to a dip in prices for non-landed properties and a significant moderation in the price increase for landed properties.

The report also noted that private residential property rentals rose at a slower pace of 2.8% quarter-on-quarter in Q2 2023, in comparison to the 7.2% increase in the previous quarter. This marks the smallest quarter-on-quarter gain since Q4 2021.

The URA statistics further indicated a doubling of private housing supply completions in the first half of 2023, compared to the same period in 2022. The year 2023 is expected to witness the completion of about 20,500 private residential units, the highest annual private housing supply completion since 2017.

The URA added that supply of private housing via the Government Land Sales Programme has been ramped up for the third consecutive year, with the total Confirmed List supply of around 9,250 units for 2023 being the highest in a decade.

Prices of private residential properties declined by 0.2% in Q2 2023 following a 3.3% gain in the previous quarter. Prices of landed properties increased by 1.1%, a significant moderation from the 5.9% increase in the previous quarter. Prices of non-landed properties decreased by 0.6%, a reversal from the 2.6% increase in the previous quarter.

Rental momentum eased across all market segments, and developers launched 2,374 uncompleted private residential units (excluding ECs) for sale in Q2 2023, compared with 1,312 units in the previous quarter. The number of resale and sub-sale transactions also saw an increase.

The URA report concluded that based on expected completion dates reported by developers, approximately 12,306 units (including ECs) will be completed in the second half of 2023.

Commenting on the URA’s statistics, Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru, noted, “Private residential property prices dropped 0.2% in Q2 2023 after a 3.3% quarter-on-quarter growth in Q1 2023. This marks the first quarter of price drop after twelve consecutive quarters of price growth.”

Dr Tan attributed the drop to the property cooling measures introduced in April 2023, which significantly reduced the number of private properties bought by foreigners. “In lieu of the adjusted Additional Buyer’s Stamp Duty (ABSD) rates, the number of private properties bought by foreigners dropped nearly 23.0% QoQ (according to URA caveats lodged as of 25 July 2023).”

Dr Tan also highlighted the strong demand from Singapore Citizens and Permanent Residents (PRs) for new condo launches in Q2 2023. The overall transaction volumes for uncompleted private residential units increased, rising 73.9% QoQ due to a low base in Q1. However, it fell by 10.0% YoY, due to the increased cost of acquiring investment property.

Regarding the biggest price drop, Dr Tan noted, “Following the 4.4% price growth recorded in Q1 2023, the Rest of Central Region (RCR) saw a 2.5% decrease in Q2 2023 for non-landed private property prices. This dip is the largest QoQ decline observed among the three regions. Although price moderation was observed, the major new condo launches in the RCR were well-received and bolstered prices in the region.”