URA’s 3rd Quarter Report: Minor uptick in private property prices amid complex market influences

The Urban Redevelopment Authority (URA) released its 3rd Quarter report this Friday, showing a minor increase in private home prices, suggesting a small uptick. However, the details present a more intricate view of the property scene, emphasizing that larger economic factors and people’s outlook are significantly influencing the market.

The URA’s statistics for the 3rd Quarter of 2023 highlighted a 0.8% increase in private residential property prices, juxtaposed against a 0.2% dip in the preceding quarter. Notably, non-landed properties saw a price surge of 2.2%, overturning a 0.6% decrease in Q2. This uptick was, however, not universally experienced; landed properties recorded a 3.6% price decrement, and the Core Central Region (CCR) also suffered a 2.7% decline.

In the rental arena, a slowing momentum was palpable. Private residential property rentals grew by just 0.8%, overshadowed by the more robust 2.8% increase of the previous quarter. Especially telling was the rental performance in the CCR, where a 1.7% contraction was observed.

Developer activity remained vigorous, with 2,805 new private residential units launched, outstripping the 2,374 units from Q2. Sales, however, tapered to 1,946 units from 2,127. The Executive Condominium (EC) segment experienced a renaissance, with 360 new units launched and an impressive 420 sold, starkly contrasting the zero new ECs previously.

Resale transactions, a significant market component, slightly receded to 2,900, while sub-sale transactions grew, suggesting a diversifying market. Alarmingly, the vacancy rate for completed private residential units (excluding ECs) leapt to 8.4%, a substantial climb from Q2’s 6.3%.

In the commercial sectors, both office and retail spaces revealed promising trends. Office space prices rose by 0.8%, with rentals up by 4.9%, indicating strong demand. The retail segment also enjoyed a price and rental increase of 0.6% and 0.5%, respectively. However, these positive signs were tempered by a nuanced supply-demand relationship, seen in changes in the stock and vacancy rates.

The URA’s detailed briefing also underscored a significant upsurge in the pipeline supply across residential and commercial spaces, a strategic move anticipated to meet future market needs and stabilize prices.

In response to the URA’s latest figures, Dr Tan Tee Khoon, Country Manager – Singapore at PropertyGuru, provided a meticulous analysis, hinting at a market at its inflection point. “The 0.8% ascension in Q3, following a 0.2% falter in Q2, suggests we’ve reached a market plateau. The modest quarter-on-quarter increase deviates from the more aggressive 2.1% growth narrative of 2022,” Dr Tan remarked.

The PropertyGuru expert pinpointed the retreat of foreign investors, post the April 2023 cooling measures, as a significant influencer, particularly impacting the CCR’s 2.7% price contraction. This withdrawal, coupled with culturally rooted market apprehensions during the Hungry Ghost Festival, saw overall transaction volume shrink by 38% between July and August.

Dr Tan spotlighted the Rest of Central Region’s (RCR) resilience, buoyed by standout projects like Grand Dunman. “The RCR’s recovery, particularly in non-landed private properties, is attributable to robust local demand. Grand Dunman’s launch success, with over half of its units sold, underscored this, attracting predominantly Singaporean buyers,” he observed.

Concluding, Dr Tan proposed a cautious outlook: “We’re observing a market recalibrating in real-time. The dynamics suggest price movements will remain conservative, with potential minor fluctuations as the sector navigates both local and global economic cues.”