SINGAPORE, 3 April 2023 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on URA’s flash estimate for 1Q 2023 private residential property price index.
The URA released today the flash estimate for the 1Q 2023 private residential property price index. Overall private property prices rose by 3.2% qoq in 1Q 2023, an acceleration from the 0.4% growth recorded in the previous quarter.
Landed home prices rose by 5.7% qoq, while non-landed home prices rose by 2.5% qoq. Among the non-landed segments, the RCR segment recorded the strongest price increase of 4.0% qoq, on the back of new projects such as Terra Hill that launched during the quarter.
The pickup in price growth attests to the robustness of demand and affordability among homebuyers. However, the dynamics in the residential market is more fluid than a year ago. Costs of living and borrowing have soared and are unlikely to abate rapidly in the near future. The growth outlook remains highly uncertain, given the manufacturing downturn and external uncertainties. While the labour market remains relatively healthy, there is also the risk of layoffs expected to pick up pace going forward. The rising spate of completions over 2023-24 will also exert pressure on the rental market.
Homebuyers should continue to exercise prudence in big-ticket items like homes. Amid a mix of economic uncertainty, elevated borrowing costs, greater transaction costs and increasing prospects of a rental correction, property investments are likely to yield positive returns over the medium to long-term. Given that numerous projects are expected to be launched this year, buyers can afford to wait for the right product and location that best suits their needs and budget.
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