2023 New Private Residential Sales Volume Lowest In 16 Years, Dropping By 9.6% For Second Consecutive Year

Savills Research reported a drop of 9.6% in new private residential sales to 6,421 units in 2023 for the second consecutive year. This was the lowest in 16 years since 2008 when 4,264 units were sold during the global financial crisis. Delays in obtaining the relevant sales permits which impacted new launches were a major factor contributing to the drop.

While the number of new private residential launched units had declined in 2023 to 7,551 units, it was still 66.8% higher than the 4,528 units in 2022. In 2023, both the Rest of Central Region (RCR) and the Outside the Central Region (OCR) saw year-on-year (YoY) increases of 205.4% (4,233 units) and 61.1% (2,688 units) respectively, but the Core Central Region (CCR) recorded a 57.2% (630 units) YoY decline.

On a quarterly basis, all three market segments registered declines in the number of units launched in Q4/2023, with the OCR seeing the smallest decline of 20.1% (885 units). The CCR saw a decline of 40.5% (125 units) while the RCR saw a 96.6% (50 units) drop quarter-on-quarter (QoQ).

Although there were less new launches in Q4, demand for these new releases was strong, with two projects selling over half of their total units. The J’den, a 99-year leasehold condominium located on the site of the former JCube mall, had a take-up rate of 88.6%. Next was Watten House, a luxury freehold 180-unit condominium at Shelford Road, which had a take-up rate of 63.4%.

In Q4, secondary sales fell for a second consecutive quarter by 0.4% to 3,242 units in Q4/2023. On a yearly basis, secondary sales declined by 14.7% to 12,623 units. This could be likely due to homebuyers feeling the impact of higher mortgage rates. The fall was felt largely in the OCR where there was a drop of 17.1%, followed by a 13.6% fall in the CCR and a 10.6% decline in RCR secondary sales.

Foreign purchases of non-landed property had been adversely affected by ongoing economic uncertainties, high interest rates and cooling measures, especially the 60% Additional Buyer’s Stamp Duty (ABSD) rates. In Q4, non-landed residential homes bought by foreigners fell for a third consecutive quarter by 23.2% to 63 units. This was the lowest in 30 years since the data was publicly available via URA REALIS since Q1/1995.

Non-landed home purchases by permanent residents (PRs) and Singaporeans also dropped for a second consecutive quarter by 21.8% and 20.3% QoQ to 631 units and 3,135 units respectively.

In 2023, non-landed home purchases by foreigners declined 33.3% YoY to 616 units, the lowest in 27 years since 1998 when 458 units were acquired. Non-landed home purchases by Singaporeans and PRs also fell 8.6% and 12.7% YoY to 13,911 units and 3,030 units respectively last year.

Last year, nearly all the property segments recorded slower price appreciation compared to 2022. Strong economic headwinds and high mortgage rates could indicate a slowdown in the property market. Prices of landed homes grew 8% in 2023, slower than 9.6% in 2022. Non-landed home prices rose 6.6% in 2023, much lower than the 8.1% increase in 2022.

The average price from Savills basket of luxury non-landed private residential projects recorded its first decline after 12 consecutive quarters of increase. However, the fall was marginal, at 0.2% QoQ to S$2,596 psf in Q4/2023. On a YoY basis, prices were still 1.1% higher, although lower than 3.8% recorded in 2022.

Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore said, “For 2024, we believe that new sale prices would still be expected to rise but resale prices might prove less resilient. Although inflation had come off its peak, the overall growth of the economy (Nominal GDP) would still be significant. Given the positive historical correlation between the URA Property Price Indices and Nominal GDP, it might cause the URA index to rise marginally for the full year. However, at this point, we forecast overall prices to remain flat for 2024.”

George Tan, Managing Director, Livethere Residential, Savills Singapore commented, “Despite the impact of the ABSD and high interest rates, the performance of project launches such as The J’den and Watten House and prices achieved in Q4 reflects buyers’ confidence in the residential market and robust household liquidity. Although there is healthy interest in secondary sales, a disparity exists between seller optimism with the high prices achieved by new project launches and buyer reliance on past transacted values as reference points.”

Read the Q4 2023 Residential Sales briefing here.