APPD Market Report Article

Singapore

November 29, 2022

Ong Teck Hui, Senior Director - Research, Singapore

16.8%

SGD 5.77

Rents
Rising

Some prime projects perform well despite slower market

  • Prime non-landed new home sales volume in 3Q22 dipped 4.4% q-o-q as there were no major fresh prime projects launched in the quarter. Some of the top-performing new projects during the quarter include previously launched projects like Hyll on Holland, which sold 69 units at a median price of SGD 2,673 per sq ft, and Perfect Ten, which sold 65 units at a median price of SGD 2,938 per sq ft.
  • In the prime resale market, transaction volume was 4.6% lower q-o-q as market activity slowed during the Hungry Ghost month, which lasted from 29 July to 26 August 2022, as well as due to concerns over rising interest rates, which affected the whole residential market. Overall, total prime sales volume fell 4.3% q-o-q.

Vacancy rates continue falling due to lack of new completions

  • Based on the latest data available, there were no new project completions in prime districts during the quarter. Projects with scheduled completions in the quarter continued to face delays in obtaining their Temporary Occupation Permits (TOPs).
  • Completed supply in 2022 is still expected to be higher than in 2021, as some projects anticipated to complete in 2021 are to be completed in 2022 instead, due to construction delays. Completed supply numbers are likely to continue rising, with a much higher level of completions expected in 2023.

Prime prices and rents continue to post increases

  • Growth in prime prices slowed q-o-q in 3Q22 as buyer demand softened during the quarter, likely due to the Hungry Ghost month, typically a lull period for home purchasing activity, as well as rising interest rates for home loans.
  • Prime rents hastened pace for the third straight quarter as limited available supply pushed rents up at an increased momentum, amid strengthening leasing demand.

Outlook: Market uncertainty likely to moderate demand

  • Prime prices are expected to increase at a moderated pace for the rest of the year and post slower growth in 2023. Weaker market sentiment is expected due to slower economic growth in 2023, rising interest rates, as well as the recently imposed cooling measures.
  • Prime rents are likely to continue their uptrend for the remainder of 2022 due to limited supply available for lease and strong leasing demand. However, sluggish rental growth is expected in 2023 as the economy slows and a large injection of new stock is anticipated to come online.

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

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