The resale private housing market rose 13.8% year on year in 2Q2023, helped by a narrowing price gap with HDB resales
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The number of residential private units sold through the resale market during 2Q2023 increased 13.8% q-o-q to 3,261 units, according to the research notes published in the journal of Savills Singapore. While this is the end of a three-quarter drop in the market for private resales however, the market is lower by 26.1% on a yearly basis.
The growth in the resale market during the quarter was sustained by increased selling in both the Rest of Central Region (RCR) that saw an 24.7% increase in sales volume, and also in the Outside Central Region (OCR) that saw an 12.8% increase in sales volume. The sales within the Core Central Region (CCR) was unchanged from the prior quarter.
As per Alan Cheong, executive director of Savills Research and Consultancy, the growth on the secondary marketplace may be due to the rising HDB prices in the last few quarters, which has narrowed the gap between public and resale prices and the private market.
Additionally, the last quarter witnessed an 22.6% decline in the amount of homes that were not landed by foreign buyers to 205 units during 2Q2023. It was the lowest number since 1Q2022 when foreigners bought more than 145 homes at the time. “This was due to the increasing of an additional stamp tax [ABSD] to foreign buyers at the latter part of April,” says Cheong.
Savills said that a selection of private residential luxury, non-landed projects it tracks experienced an improvement in the pace of price growth. The prices of luxury homes that are not landed in this particular basket recorded only a tiny 0.4% q-o-q increase in 2Q2023 and amounted to around $2,591 per square foot.
“Following the slowing of global demand for luxury properties because of higher ABSD rates One of the major buyers of luxury homes has diminished and could have contributed to a slower rises for these properties,” says Cheong.
In the future He points out that there aren’t many big-sized projects (above 500 units) scheduled for release in the next couple of quarters.
“We continue to believe that the private home property prices to increase by 7% through 2023.” Says Cheong. “However considering the current challenges that the economy faces, at the new benchmark of $2,000 psf for the OCR and $2,400 per square foot in the RCR initial weekend sales for private residential launches could fall between around the 25% to 35% or 35% in the 3Q2023 period until the beginning of 2024.”