Private home prices in the second quarter of 2023 declined by 0.4 per cent, reversing the 3.3 per cent increase in the first quarter, flash estimates from the Urban Redevelopment Authority (URA) showed. This marks the first decline since Q1 2020 when prices fell 1 per cent during the onset of Covid-19. Year on year, the index is up 7.2 per cent, which was the smallest increase since 7.1 per cent in Q2 2021.
Year to date, private home prices edged up 2.9 per cent in the first six months of this year, less than the 4.2 per cent registered in the first half of 2022 and 4.1 per cent in the first half of 2021.
Price growth may have slowed this year as new cooling measures were implemented on September 2022 and April 2023, which raised the ABSD and affected the borrowing ability of buyers. Some buyers were also affected by higher borrowing costs as interest rates remain elevated.
URA data showed that the non-landed segment dipped by 0.5 per cent, after a 2.6 per cent increase in the first quarter. The city fringe, or the rest of central region (RCR), led the non-landed sub-markets with a 2.6 per cent drop, compared with a 4.4 per cent gain in the preceding quarter. Conversely, prices of non-landed private residential properties in the suburbs or the outside central region (OCR) rose by 1.2 per cent in Q2 2023, slower than the 1.9 per cent growth in the previous quarter.
Although more private homes were launched last quarter, the overall median price of non-landed new sales transactions excluding EC dipped by 1.8 per cent from S$2,584 psf in Q1 to S$2,537 psf in Q2 this year, according to URA Realis caveat data.
The median price of new homes fell across the board, with prices for non-landed homes excluding EC in RCR decreasing the most by 5.8 per cent from S$2,652 psf in Q1 to S$2,498 psf in Q2 this year, followed by homes in OCR dipping 2.4 per cent from S$2,073 psf to S$2,024 psf, and CCR slipping 0.5 per cent from S$2,921 psf to S$2,906 psf over the same periods.
Barring a global economic downturn or unforeseen circumstances, buying activities may continue in the second half of this year as more projects are slated for launch. Developers may bring forward their project launches before the lunar seventh month which may boost new home sales in the coming months. More private homes will also obtain their TOP (temporary occupation permit) which usually will lead to more homes being put up for resale after completion.
Moreover, there will still be demand for private homes in the long run as a number of Singaporeans still subscribe to the notion of downgrading as part of one’s retirement plan, while others desire to upgrade their properties.