APPD Market Report Article


September 4, 2023

Chia Siew Chuin, Head of Residential Research, Singapore


SGD 6.31


Overall prime sales fall as cooling measures weigh on demand

  • Prime fresh project launches remained absent in 2Q23, resulting in a drop in new sales volume quarter-on-quarter (q-o-q) though buying interest for projects currently in the primary market stayed fairly healthy. Top-selling projects include The Atelier (74 units sold at a median price of SGD 2,662 per sq ft) and Leedon Green (44 units sold at a median price of SGD 2,869 per sq ft).
  • Prime resale volume also fell q-o-q, leading to an 11.0% q-o-q drop in overall Prime sales volume. The April 2023 market cooling measures, which raised Additional Buyer’s Stamp Duty (ABSD) rates, could have moderated demand from investors, especially those who faced sharp rate hikes. Hence, some may have taken a step back to monitor market conditions before committing to their property purchases.

Prime vacancy rate inches up on the back of more completions

  • Available information as at end-June showed that six prime projects were completed in 2Q23: Haus on Handy, Boulevard 88, One Draycott, Dalvey Haus, RV Altitude and Wilshire Residences. However, subject to government processes, some of these projects could receive their Temporary Occupation Permits on a later date.
  • Amid a larger number of new project completions, and with physical occupancy lagging new completions, Prime vacancies rose marginally in the quarter. 

More leasing options for prospective tenants keep rents flat

  • The growth in prime non-landed home prices in 2Q23 kept pace with the momentum in 1Q23, as buyers continued to resist committing to higher property prices amid economic uncertainty, elevated interest rates and new property cooling measures.
  • Prime rents registered a flattish growth q-o-q. Prospective tenants had more leasing options as more new units were completed and added to the stock, preventing landlords from asking for higher rents.

Outlook: Prime market likely to see stronger interest from locals

  • The anticipated return of foreign purchasers, including the Chinese, to the Prime market is unlikely to materialise in the near future. The sharp hike in ABSD rates is expected to moderate foreign buying demand as those affected may decide to hold off and monitor the market before committing to their home purchases. Locals, on the other hand, may take the opportunity to enter the Prime market. 
  • The supply-demand imbalance in the leasing market should continue to improve over the next few quarters as a number of large-scale projects are expected to complete. With more selections for lease, landlords’ stance for higher rents should weaken in favour of tenants and keep rents in check.

Note: Singapore Residential refers to Singapore's overall prime and luxury residential markets.

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