EDMUND TIE’s comments: URA 4Q 2022 real estate statistics
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  • 27 January 2023

EDMUND TIE’s comments: URA 4Q 2022 real estate statistics

SINGAPORE, 27 January 2023 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on the URA 4Q 2022 real estate statistics.


Primary sales

Primary sales rose at a softer pace in 4Q 2022, due to a dearth of launches post the cooling measures in late September. Caution prevailed in the market and developers launched only 504 units in 4Q 2022. For 2022, developers launched 4,528 units, 56.9% drop from 2021. Property price growth fell to 0.4% qoq in 4Q 2022 from 3.8% in 3Q 2022. Although the full-year primary sales fell by 45% to 7,099 units in 2022, the greater take-up rate of about 157% was respectable in a year of heightened economic uncertainty, rising inflation and interest rates, attesting to the underlying organic demand and ample market liquidity.


Property prices rose by 8.6% in 2022 compared to 10.6% in 2021, led by the landed segment (9.6% growth). Landed home prices have been underpinned by sustained demand amid limited supply. For the non-landed market, the decline in launches limited pricing performance. For instance, the non-landed OCR segment saw prices decline by 2.6% qoq in 4Q 2022, a reverse from the 7.5% growth in the previous quarter, due to a dearth of new project launches towards year end, while the previous quarter reported stellar performance of various suburban projects.

Secondary sales

The secondary sales market also saw lower transaction volumes of 14,791 units in 2022, a 28% decline from 2021’s 20,530 units, weighed down by a tighter overall financing environment and softer economic conditions. Notably, subsales bucked the trend last year, with 765 units sold in 2022, a 34.7% increase from 2021’s 568 units. The share of subsales rose in 2022 to 5.2%, the highest in 6 years since 2016. However, given the state of record property prices, most vendors were able to reap positive gains and distress selling has been limited.

Unsold inventory

The supply pipeline remained stable at around 55,000 units in 4Q 2022. As at 4Q 2022, there were 16,024 units with planning approvals in the pipeline that were unsold. Including unsold completed units and units without planning approvals, the total unsold inventory stood at 24,903 units, about 15.8% higher than that in the previous quarter. Based on an expected primary sales take-up of 8,000-9,000 units for 2023, the unsold inventory is expected to be cleared in 2.8 to 3.1 years, attesting to a more balanced demand-supply situation now< compared to the tight supply in early 2022.

Rental market

Completions picked up in 4Q 2022 to 4,245 units, the highest in 6 years since 4Q 2016. For 2023, 17,427 units (excluding ECs) are expected to come onstream, which will ease the supply crunch and alleviate the rental market tightness. Rental housing budgets will also likely be capped by slowing economic conditions, amid other cost of living pressures. Rental growth dipped to 7.4% qoq in 4Q 2022 from 8.6% in 3Q 2022. For 2022, rents grew by 29.7%, the highest in 16 years since 2007 when rents rose by 41.2% at the height of the market then. The buoyant rental increase is broad-based across all market segments and reflects the spate of construction completion delays as well as a greater influx of foreigners as the border reopens. While the rental market could still remain tight in the near term as the vacancy rate declined to 5.5% in 4Q 2022, we expect overall rental growth to soften across 2023 to more sustainable levels.


Barring a sharp deterioration, the current healthy labour market is expected to lend support to housing demand, notwithstanding the tighter financing conditions. As developers pick up on the pace of launches to about 10,000 units in 2023, we expect this to provide an uplift to primary sales activity to 8,000-9,000 units. For the secondary market, we expect a moderation in volumes to 10,000 to 12,000 units. The rising cost of land prices will help provide a floor to prices of new project launches, although developers would likely adopt a more cautious approach to pricing by factoring in affordability concerns. Furthermore, the greater supply of launch competition in 2023 will also limit price appreciation. We expect overall prices to rise by 1-3% in 2023, following 2022’s 8.6%.




Prices of office spaces in the Central Area and Central Region both saw increases of 5.0% and 3.7% on the quarter, respectively after two quarters of decline. This is likely attributed to a revival of interest in strata office spaces which offer more a palatable investment quantum amid a difficult financing environment.

Demand and rents

2022 marked the first year of positive new absorption (+44,000 sqm) in the market in three years, led by the Downtown Core planning area. Leasing demand fell to 9,000 sqm in 4Q 2022, following two quarters of 24,000, as some firms took to rightsizing their corporate space requirements. Rental growth remained healthy, with office rents in the Central Region posting 5.1% qoq growth in 4Q 2022 and 11.7% growth for the full year, a clear sign of post-pandemic recovery. Office rents in the Central Area posted slightly stronger growth of 6.6% and 11.9% in 4Q 2022 and 2022, respectively.

However, the rental increase in 4Q 2022 is the result of relative tightness in the market rather than buoyant demand. Through 2022, the overall office stock has been declining; in fact, 86,000 sqm was removed from the market in 2022, the first decline since 2007. The office market remained tight in 4Q 2022, with the vacancy rate declining to 11.3% from 11.7% in the previous quarter.

Office demand was mainly driven by the tech, co-working and finance sectors in 2022, predominantly driven by tech in the first half of 2022 and picked up by the co-working and finance sectors towards the end of the year. Looking ahead, while the tech sector is likely to provide very limited demand, the market will still see demand for quality office space, particularly supported by the co-working, finance and professional services sectors. White-collar employment growth has proven to be robust and will likely provide support for space take-up in 2023.

Based on URA statistics, Category 2 spaces (generally office spaces which are older or in less central loations) have seen a stronger pickup in rents over the course of 2022; 11.3% for Category 2 rents vs 6.5% for Category 1 rents, alluding to the fact that more occupiers are looking at decentralised locations to contain occupier costs amid a slowing business environment. Nonetheless, vacancy rates have declined more for Category 1 spaces over 2022: -2.5% pts vs -1.1% pts for Category 2 spaces, consistent with EDMUND TIE’s research, where CBD Grade A office spaces recorded 95.8% occupancy rate in 4Q 2022, compared to 88.3% in Downtown Core (all grades). As such, we could see a greater gravitation of demand towards the two ends of the grade spectrum for 2023.


The market will have to grapple with incoming supply from the completion of two major office projects in the downtown in 2023, as well as an increase in shadow space availability in the market. Notably, Guoco Midtown, which received its TOP in January, have seen healthy leasing commitments, while Central Boulevard Towers has achieved at least 30% pre-commitment (Amazon).  Partially mitigating the effects of the new supply would be the removal of older office for redevelopment.


On the whole, we expect the greater supply pressures and soft business climate to cap office leasing demand growth for 2023. Rental growth is expected to moderate, as firms veer towards consolidation and rightsizing their space needs rather than outright expansions. We expect Premium and Grade A office rents in the CBD to rise by 2-4% and 1-3%, respectively in 2023.




Despite an increasingly challenging retail climate, the overall retail market demonstrated resilience and recorded sustained demand in 2022, largely supported by the Outside Central Region and Orchard area, with the latter benefiting from the tourism recovery.  In the endemic era, overall retail demand continued to strengthen in the quarter with net absorption recording a nearly two-fold increase to +66,000 sqm in 4Q 2022 from +30,000 sqm in the previous quarter. The pickup in demand in 4Q 2022 was largely broad-based across segments, with the exception of the Fringe Area recording negative take-up. In 2022, islandwide net absorption was +92,000 sqm, marginally lower than 2021’s +100,000 sqm, largely supported by the Outside Central Region and Orchard area.

Amid strengthening demand and limited supply, the vacancy rate declined to by 0.7% pts to 7.1% in 4Q 2022, the lowest since 2014. 2022 saw numerous store openings by new-to-market brands, such as South Korean convenience store chain Emart24 at Jurong Point and Nex, and Melbourne-based Puzzle Coffee at Ion Orchard, as well as expansions or re-entries by F&B and wearing apparel retailers, which demonstrated retailers’ confidence and attractiveness of operating in Singapore due to its political stability and pro-business regulatory regime.

Prices and rents

The financial performance of the retail market painted a less rosy picture, as retail prices and rents in the Central Region continued to fall. In 2022, retail prices fell by 7.8%, the steepest decline since 2017. 2022’s rental decline of 2.4% was noticeably lower than 2021’s 6.8% decline. Notwithstanding the improving physical metrics, landlords have had little pricing power to raise rents, as the operating environment remains extremely challenging for retailers. Covid-related government grants for businesses have all but ceased, while the usual challenges of manpower shortages and the onslaught of e-commerce have remained and, in some cases, been heightened due to the pandemic. In addition, retailers are facing rising cost challenges and a cautious consumer sentiment.


Total retail sales growth has been visibly slowing across 2022, as consumers turn cautious on discretionary spending. Nonetheless, tourism spending is anticipated to support retail sales and provide an uplift especially in the prime shopping belt, with visitor arrivals forecast to double to 12-14 million this year.

However, we take caution that considerable headwinds going forward, including high inflation and uncertainties such as possible emergence of new Covid variants, as well as any retightening of travel borders and local measures will continue to weigh on retail sentiment and consumer confidence, likely capping consumer spending and rental growth. 

Should economic conditions hold up in 2023, we expect 7% to 9% growth for prime first-storey rents in Orchard this year, as the tourism recovery gains traction, with potential upside from China’s easing of Covid measures. For the other retail segments, we forecast rental growth of between 3% and 6% for prime mall spaces in 2023.



For further information, please contact:

Seah Li Ching (Ms)

Corporate Communications

DID: +65 6393 2369

Email: liching.seah@etcsea.com

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