EDMUND TIE’s comments: URA Q1 2023 real estate statistics
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  • 28 April 2023

EDMUND TIE’s comments: URA Q1 2023 real estate statistics

SINGAPORE, 28 April 2023 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on the URA Q1 2023 real estate statistics.



  • Demand for private homes moderated in Q1 2023 due to lower take-up rate, as supply from new launches saw a greater increase than primary sales.  

  • Primary sales climbed by 82% qoq in Q1 2023 to 1,256 units, a reversal from the 68% qoq decline in the previous quarter and the highest since Q3 2022. The performance this quarter is fuelled by robust sales in some of the new project launches. Launched units jumped by almost threefold in Q1 2023 to 1,312 units, as compared to 504 units in the previous quarter.

  • The decline in secondary sales volumes in Q1 2023 dipped by 1% qoq for the third straight quarter to 2,865 units. We anticipate weakness in the months ahead, as housing affordability is likely to be weighed down by elevated inflationary pressures and borrowing costs, while the recent increase in both ABSD and marginal buyer stamp duty will also dampen homebuying sentiments. In particular, the share of sub-sale transactions in the RCR rose to 11.7%, as compared to Q4 2022’s 10.4%. This also coincides with the increase in prices in the RCR, as sellers take the opportunity to cash out their properties at higher price quantum. However, the increase in the share of sub-sale transactions in the RCR may warrant closer watching as it could point towards a higher level of distress selling.

  • Even with a dearth in new project launches in the CCR segment, there appears to be active interest in this segment. Among the three segments (i.e. CCR, RCR and OCR), CCR commands the highest take-up rate (3.7%) and forms the bulk of completed and unsold units (165 units) in Q1 2023. This is because homebuyers see higher value in buying homes in the CCR, especially with the narrowing of price gap between CCR and RCR.

  • Share of foreign purchases in private homes dipped to 7.0% in Q1 2023, following Q4 2022’s 7.2%. Moving forward, we expect share and volume of foreign purchases to moderate this year, amid the more punitive hike in ABSD rates for foreigners (doubled from 30% to 60%). Nonetheless, we expect to see sustained demand from Americans, as they are exempted from paying the ABSD on the first residential property purchase in Singapore due to the free-trade agreement. Owner-occupier demand is likely to remain stable and benefit from the more gradual price trajectory in 2023, while investment demand could soften from the recent rise in ABSD rates. There could also be some slight kneejerk reactions by Singaporeans and PRs who are purchasing properties for investment purposes, given the more modest increase of 3-5% pts in ABSD rates.

  • On the whole, overall sales volumes may soften in the near term, as buyers adopt a wait-and-see approach in the wake of the recent cooling measures.


  • Compared to 0.4% in Q4 2022, property prices in Q1 2023 climbed by 3.3% for the 12th consecutive quarter, led by the landed segment (5.9% growth). Landed home prices have been underpinned by sustained demand amid limited supply.

  • For the non-landed market, property prices rose by 2.6% qoq for the 4th straight quarter in Q1 2023. The non-landed OCR segment saw prices grow by 1.9% qoq in Q1 2023, supported by the stellar performance in the two new project launches (Sceneca Residence and The Botany at Dairy Farm) in the OCR. This also marks a reversal from the 2.6% decline last quarter. 

  • Pricing momentum could slow down this year in the immediate aftermath of the cooling measures. Overall prices could rise at a more sustainable level of 4-6% in 2023, following 2022’s 8.6% growth. This is due to the high land and construction costs that developers will have to consider when deriving their new launch pricing.      

Unsold inventory

  • The supply pipeline remained fairly stable at 52,590 units in Q1 2023. As at Q1 2023, there were 16,252 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 24,208 units, 2.8% lower than that in the previous quarter. Based on an expected primary sales take-up of 7,000-8,000 units for 2023, the supply-demand dynamics are now more balanced, and the unsold inventory is expected to be cleared in 3-3.5 years.

Rental market

  • In 2023, with an influx of completions, this could help to ease the rental pressure. Rental housing budgets is likely to be tempered by slower economic growth and rising costs of living. Rental growth moderated to 7.2% qoq in Q1 2023, following 7.4% in Q4 2022. In particular, rental growth for the non-landed segment has softened to 6.2%, as compared to 7.5% in the previous quarter. The RCR segment may undergo more pressure in the face of high vacancy rate as well as a slowdown in rental growth. While the rental market could remain relatively tight in the near term, rental growth is poised to slow down to 10-15% for 2023, down from 2022’s 30%, as more supply are coming onstream this year.


  • Looking ahead, coupled with a still relatively tight labour market and sustained organic demand, new home sales are poised to reach 7,000-8,000 units for 2023, up from 2022’s 7,099 units. Against the backdrop of macroeconomic headwinds and tighter financing conditions, we expect a moderation in the sales volume in the secondary market to 8,000-10,000 units, following 2022’s 14,791 units.

  • In addition, with a slowdown in foreign demand as a result of the hike in ABSD, the overall pie for homebuying demand is expected to shrink in the near future. Some launches may be postponed from Q2 2023 to the second half of this year, especially those located in the prime areas.

  • Overall, the price trajectory is more fluid as the still-high construction costs is likely to put constraints on pricing. Other factors affecting prices include a moderation in homebuying demand as well as tighter financing conditions that weigh on affordability. The risks are also growing for a price correction in the later part of this year.




  • Prices of office spaces in the Central Area saw a decrease of 0.4%, while those in the Fringe Area witnessed an increase of 2.3% and the Central Region remained the same in Q1 2023.

  • Riding on investors’ interest in prime strata office spaces, units at Solitaire On Cecil and Southpoint both saw sales at record prices in Q1 2023. The price recovery for office assets will continue to be supported by the tight supply of office spaces, especially for strata office spaces. The momentum and interest in strata office units will likely continue in 2023, even amid the expectation of rising investment costs on the back of global economic headwinds.


Demand and rents

  • Q1 2023 saw positive absorption (+21,000 sqm), led by the Downtown Core planning area (+27,000 sqm) that witnessed the highest net absorption since Q1 2020.

  • Leasing demand in the Central Region improved from +9,000 sqm to +23,000 sqm due to the significant increase in Downtown Core. However, the Rest of Central Area (RCA) and the Outside Central Area (OCA) segments saw a negative net absorption of -13,000 sqm and -2,000 sqm, respectively, a corresponding drop from -2,000 sqm and 0 sqm in 4Q 2022.

  • The strength in office leasing demand also led to a sustained healthy rental growth, with office rents in the Central Region posting 5.1% qoq growth in Q1 2023. Office rents in the Fringe Area posted slightly stronger growth of 8.8% qoq, a reversal from the 4.0% qoq decrease in Q4 2022.  In the Central Area, office rents saw a 3.9% qoq increase, a moderated growth rate compared to the 6.6% qoq increase clocked in Q4 2022.

  • Office demand is supported by the co-working, finance, and professional services sectors. There is also an increase in the number of new family offices set up in Singapore in 2022 and this trend will likely continue in 2023. Hiring intentions remain firm, despite a barrage of layoff news. Technology talents continued to be highly sought after due to ongoing digitalisation trends which led to sustained demand for technological skills.

  • Amid business challenges, firms will continue to strive for efficiency and cost management with rightsizing, alongside the implementation of hybrid work arrangements. With rightsizing and limited new take-up of office spaces, firms are leaning towards renewals instead of relocation or expansions. Additionally, the flexibility of smaller spaces at 5,000 to 10,000 sqft and fitted out spaces including current shadow space offerings will have the most appeal in the office leasing market.

  • Due to the completion of Guoco Midtown, vacancy rate in the RCA reflected an increase of 0.7 percentage pts. However, the overall office market remained tight in Q1 2023, with islandwide vacancy rate decreasing by 0.1 percentage points to 11.2%, the lowest since Q1 2020. Quality office spaces, a post-pandemic emphasis, remains as a top pick for firms. According to EDMUND TIE’s research, CBD Grade A office spaces recorded 95.9% occupancy rate in Q1 2023, compared to 88.1% in Downtown Core (all grades).



  • The office stock increased in Q1 2023 with the completion of Guoco Midtown; however, supply completions are not high and office stock was also removed for alterations and additions works during the quarter. Beyond the future completion of Central Boulevard Towers, supply is likely to remain relatively tight.


  • On the whole, leasing demand is expected to moderate, as firms continue to pursue efficiency and rightsizing. However, given that supply remains relatively tight beyond 2023, rents could still rise marginally in 2023, with Premium and Grade A office rents in the CBD expected to rise by 1-3% during the year.



  • Under the challenging retail climate, net absorption reversed from +66,000 sqm in Q4 2022 to -7,000 sqm in Q1 2023. The fall in retail demand in Q1 2023 was broad-based across segments, with the exception of the Fringe Area which increased from +6,000 sqm in Q4 2022 to +14,000 sqm in Q1 2023.

  • Reflecting lower retail demand, the islandwide vacancy rate increased by 0.5 percentage points to 7.6% in Q1 2023.  This can be attributed to supply completions totalling 12,900 sqm including Sengkang Grand Mall (8,500 sqm) and completions of hotel developments with retail components.  In particular, the Orchard area saw the greatest increase by 4.1 percentage points to 13.9%, largely attributed by a decrease in demand (-24,000 sqm), on top of an increase in supply (+5,000 sqm).

  • There is a reduced need and demand for large storefronts, amid the turbulence in the global economy and the rise of e-commerce which provided retailers the option for direct-to-consumer online sales through livestreaming on social media platforms or allowing a click-and-collect/pick-up feature.  

Prices and rents

  • In Q1 2023, both the Central Region’s prices and rents declined by 0.9% qoq and 0.3% qoq, respectively, a continuation from their downward trend over the past 4 quarters, albeit moderated as compared to previous quarters.  On one hand, landlords are facing rising financing and operating costs; on the other, retailers remain reluctant to commit to higher rental rates amid other high operating, materials, and manpower costs in a cautious retail climate.


  • Retail sales growth will moderate further in 2023, as consumers will be more inclined to tighten their belt and reduce discretionary spending. Tourism recovery will continue to support the retail market. However, despite visitor arrivals recording 1.02 million in March 2023, a new post-pandemic record, the growth momentum has slowed in recent months. However, with rejuvenation plans in progress for major shopping belts including Orchard, the retail market can expect more positive traction towards the end of the 2023 and in 2024. The retail market will also see spill-over demand with the arrival of Chinese tourists that is expected to increase in the second half of 2023, following a normalisation of flight capacity between Singapore and China.

  • Amid a slower than expected recovery in the retail sector, our growth forecast has revised down to 2% to 5% growth for prime first-storey rents this year, boosted by the Chinese travel demand and overall tourism recovery. For the other retail segments, we forecast rental growth of between 1% and 1.5% 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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