EDMUND TIE’s comments: 2Q 2023 Private Residential Property Price Index Flash Estimates
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  • 03 July 2023

EDMUND TIE’s comments: 2Q 2023 Private Residential Property Price Index Flash Estimates

SINGAPORE, 3 July 2023 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on URA’s announcement today on 2Q 2023 private residential property price index flash estimates.

The soft economic environment and tight financing climate, coupled with repeated rounds of past cooling measures, have taken its toll on market momentum, where the overall private property price index declined by 0.4% qoq for the first time in 3 years. The last time it declined was at the start of the pandemic in 1Q 2020, where prices dipped by 1.0% qoq.

On the back that the current market up-cycle commenced in mid-2017, property prices have risen by 42% (since mid-2017) and are 25.5% higher than the previous market peak in 3Q 2013.


RCR performance

Non-landed property prices fell by 0.5% qoq, weighed down by the 2.6% decline in home prices in the RCR segment. There were four new project launches in the RCR in the second quarter – comprising Tembusu Grand, Blossoms by the Park, The Continuum and The Reserve Residences. In general, developers have been mindful to price their projects competitively, which contributed to the segment’s price performance. In the secondary market, home sellers have also faced resistance from buyers on prices, as market sentiment softened while financing limits remain tight.  

Putting things into context, the correction in the RCR is because prices in this segment have risen disproportionately more than the other two segments over the past two years. Since the end of 2020, non-landed RCR home prices have risen by almost 30%, as compared to 22.5% and 10% for the OCR and CCR, respectively.


Outlook for the rest of the year

The overall fundamentals of the property market remain intact, as organic homebuying demand is supported by a relatively healthy labour market and continual wage growth. Household incomes have kept pace with property prices, while dry powder is also reflected in stronger balance sheets over time. However, the hike in the ABSD rates will take the steam off foreign demand over the next few months, while geopolitical and economic uncertainties will weigh on the willingness and ability of households to stretch their budgets.

While price growth momentum softened across the board, non-landed home prices in the CCR and OCR continued to eke out increases. It is too early to call the peak of the market cycle and we expect property prices to trade sideways for the next 1-2 quarters. A material deterioration in economic and labour market conditions, coupled with soft land bids ahead, could precipitate a correction in prices; but a sharp pricing correction is unlikely, given the macroprudential measures that have been put in place for over a decade. Price increases for the rest of this year are expected to be moderate as homebuyers are spoilt for choice amid the slew of upcoming launches.

With an estimated 3,400 units of primary homes moved in the first half of this year and a slew of major launches slated for the third quarter, we are still sanguine for a full-year take-up of around 7,000-8,000 units for developer sales. Overall property prices could rise by 3-5% this year, with some risks to the downside. Homebuyers are advised to exercise prudence in home purchases, as the overall uncertainties persist, while financing costs are expected to trend north.



For further information, please contact:

Seah Li Ching (Ms)

Corporate Communications

DID: +65 6393 2369

Email: liching.seah@etcsea.com

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