PRICES of private homes in Singapore have accelerated in the first quarter of 2023, growing 3.2 per cent over the previous three months, according to the Urban Redevelopment Authority’s (URA) flash estimate released on Monday (Apr 3).
This follows a marginal 0.4 per cent increase in 2022Q4. It also comes after several new major launches in the past quarter and a subsequent surge in demand for new private homes, despite mounting economic headwinds, analysts said.
Flash estimates from URA showed that prices climbed 11.3 per cent year on year, even as sale transaction volume dropped by around 8 per cent quarter on quarter, and by about 38 per cent year on year in Q1.
By property type, prices of non-landed private residential properties grew 2.5 per cent quarter on quarter, after edging up 0.3 per cent in the prior quarter. Prices of landed private homes rose 5.7 per cent quarter on quarter in Q1, compared with an increase of 0.6 per cent previously.
The statistics will be updated on Apr 28, when URA releases its full set of real estate statistics for the first quarter of 2023.
The lift in home prices could be attributed to a higher proportion of new home sales, which tend to be sold at higher prices than resale homes.
In Q1, new homes, excluding executive condominiums (ECs), accounted for 33.4 per cent of total sales, up from 18.9 per cent in 2022Q4. Resales, on the other hand, accounted for 62.4 per cent of all transactions this quarter, from 76.1 per cent previously.
The launch of Terra Hill in February had set a new benchmark price of S$2,650 per square feet (psf) at the Pasir Panjang neighbourhood. The project had sold more than a third of its 102 units at its launch, and is one of the drivers for the RCR’s strong growth of 4 per cent in Q1. Likewise, in the OCR, the launches of Sceneca Residence in Tanah Merah and The Botany at Dairy Farm recorded new benchmark prices of S$2,072 psf and S$2,070 psf in their respective neighbourhoods.
The price premium of these new projects will therefore have a bigger hand in lifting private home prices in 2023, while price gains of completed homes in the resale market will likely be more moderate.
Besides new launches, there was also a higher proportion of pricier homes sold in Q1. Some 282 private homes were sold for at least S$5 million, up 19.5 per cent from 236 transactions in Q4. Of these, 26 private homes were sold for at least S$15 million last quarter, including a 6,286 square feet (sq ft) unit at the ultra-luxury freehold condominium Les Maisons Nassim for S$36 million or S$5,727 psf in February, as well as a 25,683 sq ft bungalow at 61 Wilkinson Road for S$55.5 million or S$2,161 psf in January.
Based on caveats lodged as at March 31, around 127 new homes were purchased by foreign buyers. This is a 16.5 per cent increase from the previous quarter’s 109 units. Top projects favoured by these buyers were Riviere at Jiak Kim Street, with 21 units sold; Klimt Cairnhill in the Orchard vicinity, with 20 units sold; and Perfect Ten along Bukit Timah Road, with 10 units sold. Looking ahead, analysts expect prices to continue growing, albeit at a slower pace, especially with more launches on the horizon. These are the 638-unit Tembusu Grand in Marine Parade, the 807-unit The Continuum at Thiam Siew Avenue, the 598-unit Lentor Hill Residences, and the 740-unit The Reserve Residences at Jalan Anak Bukit.