In the suburbs, property outlook sees housing prices have reached record highs, with an increase in the number of new condominiums selling for more than $2,000 per square foot. A record $344m flat transactions have taken place in the public housing market this year, with the most expensive unit selling for $1.42m.
Due to the current inflationary environment and the rapidly fluctuating interest rates, buyers will continue to experience uncertainty. Multiple cooling measures and the rising cost of living could further slow the rate of price increases.
Here are four important variables that could affect the dynamics of the property outlook in 2023.
Property outlook foresees increased housing supply with stabilised prices
By the end of 2023, property outlook anticipates buyers to have a bumper crop of more than 20,000 private residences and executive condo units. The number of residences receiving Temporary Occupation Permit status will be at its highest level in seven years.
With about 2,500 planned completions, the supply of new homes for the premium market remains tepid. Leedon Green, Kopar at Newton, Haus on Handy, Boulevard 88, and Van Holland are recently finished developments. Due to the restricted quantity and purchasers’ preference for new TOP projects, the most unsold stock may soon be consumed completely.
Launches of new homes satisfy unmet demand
Without counting ECs, more than 11,000 new dwellings will be from more than 45 projects as per the property outlook projections. Developers might space out their launches, and inventory might overflow until 2024. There will be seven or more substantial developments totalling more than 500 apartments.
With new dwellings and services, the high-profile developments in the luxury market will brighten up Districts 1 and 2 with new residences and amenities. In 2023, the government may potentially reveal the Greater Southern Waterfront precinct’s master plan and exciting new construction.
Uncertainties and rising interest rates will prompt prudence
Since low borrowing rates are unlikely to return anytime soon, most buyers will probably exercise caution while making their home purchases. The difference in pricing expectations between buyers and sellers may result in fewer deals being closed or deals taking longer to close.
This delay may be lessened by having more completed homes available in 2023. The total property outlook could be a slower demand rate, with the number of private dwellings traded in 2023 likely falling from 33,557 units in 2021 to 19,000 to 22,500 units, down from 21,000 to 22,500 units in 2022.
Rents might level off
Some renters may be compelled by rising rents to move from the private housing market to less expensive HDB apartments. More houses will also be finished and made available for rent. However, the constant influx of new rental homes might not significantly lessen rental pressures. Due to growing maintenance expenses, property tax rises, inflation, and mortgage interest rates, landlords may hesitate to lower rents.
Rents may peak and then stabilise starting in the second half of 2023 due to the overall effect. There is little relief for tenants, but at least rent increases might be slower than in 2022.
Property outlook 2023
In many nations, price adjustments and housing activity have already slowed. Even if there won’t be easy solutions to the world’s economic problems, Singapore’s real estate market might handle them differently. In the coming year, we expect high levels of investor interest.
I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.
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