Q4/2023 Residential Sales Performance & 2024 Outlook

Against the backdrop of various economic and domestic factors, private residential sales fell to 19,044 units in 2023, the lowest level since 2016 when 16,378 units were transacted.

Due to the year-end festive period and delays in obtaining the necessary approvals for sale, the number of launched units plummeted from 2,805 units in Q3/2023 to 1,060 units in Q4/2023. As a result, new sales fell 43.9% QoQ to 1,092 units. For the full year, the number of new launches came to 7,551 units or 66.8% higher on a YoY basis. New sales numbers fell for the second consecutive year by 9.6% to 6,421 units in 2023.

Number of Private Residential Units Launched and Sold in the Primary Market

Source: URA, Savills Research & Consultancy

Secondary sales of private residential properties declined for a second consecutive quarter by 0.4% to 3,242 units in the quarter. For 2023, secondary sales fell by 14.7% YoY to 12,623 units. The fall was likely due to homebuyers feeling the impact of higher mortgage rates.

Number of Private Residential Units Sold in the Secondary Market

Source: URA, Savills Research & Consultancy

Plagued by various factors, particularly the sharp rise in the Additional Buyer’s Stamp Duty (ABSD) rates, foreign purchases continued falling for a third consecutive quarter. In 2023, non-landed home purchases by foreigners declined 33.3% YoY to 616 units, the lowest since 1998 when 458 units were acquired.

Sales Volume of Non-Landed Private Residential Units by Residency Status

Source: URA, Savills Research & Consultancy

Following the 0.8% QoQ increase in Q3/2023, property prices accelerated in Q4/2023, increasing by 2.8%. This led to a 6.8% increase for the whole of 2023. However, this was lower than the 8.6% increase in 2022.

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%.

New Launches In Q4/2023 PROJECT NAME LOCATION

Source: URA, Savills Research & Consultancy

FUTURE SUPPLY

As at end of Q4/2023, there were 34,251 private residential units with planning approvals (excluding executive condominiums (ECs)) in the supply pipeline. This was the fifth consecutive quarter of decrease. However, the drop is at a more moderate pace of 7.3% compared to the 16.3% contraction in the previous quarter. Of the total supply pipeline, 49.4% (16,929 units) remain unsold, a 1.1% increase from the previous quarter’s figure of 16,747 units.

In the coming quarters, we can expect new launches but most of them are from smaller projects. The exception will be Lentor Mansion (533 units), Marina View Residences (683 units) and a condominium development at Jalan Tembusu (847 units). While these are the projects that have obtained the Housing Developer Licences, there are some sizeable developments in the launch pipeline that have yet obtained the licences. One such project is Chuan Park Residences (916 units).

OUTLOOK

For 2024, we believe that new sale prices are likely to increase with resale prices imbued with a negative bias. Although inflation has come off its peak, Nominal GDP growth will still be significant and given the positive historical correlation between the URA PPI and Nominal GDP, it may cause the URA index to rise marginally for the full year. However, at this juncture, 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.”