SINGAPORE, 2 October 2023 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on URA’s 3Q 2023 property price index flash estimate.
The 3Q 2023 flash estimate for the private property price index was released today. Overall property prices rose by 0.5% qoq in 3Q 2023, following a 0.2% decline in the previous quarter. The price increase was led by the non-landed OCR segment which recorded a 5.1% qoq increase. In 3Q 2023, the OCR saw several new launches like Lentor Hill Residences, The Myst, The LakeGarden Residences and The Arden, which helped lift transaction prices for the segment.
The landed PPI fell by 4.9% qoq in 3Q 2023, the first decline in nine quarters. However, this segment has been one of the segments that outperformed more recently; it saw a 9.6% price increase in 2022. The non-landed CCR segment saw prices fall for the second consecutive quarter in 3Q 2023, weighed down by prohibitive ABSD rates for investors and foreigners, while the recent high-profile money-laundering investigation has also affected market sentiment in this segment.
In general, developers have been restrained in their pricing strategy given the sombre economic outlook and tight financing environment. Take-up rates of most new launches have declined by a notch to about 30% to 50% in 3Q 2023, compared to about 40% to 60% in 2Q 2023. More buyers are leaning towards a wait-and-see approach to gain clarity on whether price momentum can be sustained. The juxtaposition of a gradual price increase and a decline in transaction volume in 3Q 2023, does raise doubts about the sustainability of price increases in this cycle. We expect a subdued pricing momentum for the quarters ahead, and overall private property prices could rise by 3% to 4% in 2023 following last year’s 8.6% growth. For 2024, property prices could rise by up to 2% if economic growth picks up.
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