Rents are down 2.1% in Q4 despite more housing completions and softer demand

11793 private homes including ECs are expected to be finished in the next year. In 2025, another 6,747 units are expected to be completed.

Around 18,500 units will be completed between the years 2024-2025. After the completion of 21,284 housing units in 2023, a total of close to 100,000 units for public and private homes will be completed from 2023 to 2025.

Prices were up 6.8% for the year. This is the seventh consecutive year of price increases, but it’s a slower pace than the 8.6% increase in 2022 or the 10.6% rise in 2021.

Rents fell by 2.1% in Q4 but grew 8.7% for the entire year. This is a much slower rate than the 29.7% increase in 2022.

Developers launched on the primary market 1,060 private houses, excluding ECs. This is less than half of the 2,805 units that were sold in Q3. In 2023, 7,551 new units will be available for purchase, up from 4,528 in 2022.

In Q4, new sales volume fell by 44,9% to 1,092 units from 1,946 in Q3. In 2023, 6 421 units, down from 7 099 units, were sold.

Slower overall demand, higher interest rates and multiple cooling measures have all contributed to the slowdown of price growth.

By the end of 2023, the imbalance between a robust market and a lack of supply will be corrected. This can be seen in the 21,300 units of private housing including executive condominiums that were built last year.

In 2023, private homes (excluding ECs) accounted for 19,968 units – the highest number since 2017, when 20,648 units were completed. This is a significant increase over the average annual number of 12,600 homes for the past decade.

In Q4, only 4,085 completed units were completed. Q3 saw the majority of completions, at 8,517. The vacancy rate fell from 8.4 to 8.1 percent at the end Q4, compared to 8.4 percent in Q3.

The overall rental index fell by 2.1 percent in Q4, which was the first decline in more than three years.

Rents have fallen by the most since Q2 2009. In that quarter, rents fell by 5.2 percent following the global financial crises of the previous year.

Due to the increase in the number of new homes being completed, homeowners who had been temporarily displaced by construction delays are now able to move back into their newly finished homes. Moreover, the increased number of leasing options has given prospective tenants the upper hand when it comes to lease negotiations.

In the third quarter, landed properties were the most expensive. They rose 4.6 percent in contrast to the decline of 3.6 percent in Q3. In the last year, home prices grew by 8 percent, down from 9.6 percent in 2022.

In Q4 2023 prices of non-landed property rose by 2.3 percent, up from 2.2 percent in the previous quarter. Non-landed home prices increased by 6.6 percent in the last year. This is down from 8.2 percent in 2022.

In Q4, resale activity was stable, with 2,831 sold units, down 2.4 percent from the 2,900 units in Q3. This accounted for 65,3% of all transactions in Q4, a higher percentage than the 55.8% in Q3.

There were 11,329 transactions for resale in 2023 compared to 14,026 in 2022.

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Constrained transaction volumes can be attributed to rising prices for resale houses and high interest rates. He said that the median price of resale houses rose by 2.8% in Q4. New project launches also saw higher prices. The median price for the year grew 8.8%.

Investor demand also dropped following the increase in Additional Buyers Stamp Duty. Most homes are bought either for occupation or as long-term rentals.

In H1 2024 prices are expected to remain high but stable, due to geopolitical uncertainty and a high interest rate environment. The demand, although subdued should continue to rise.

Analysts expect that prices will rise by 3 to 5 percent in 2024.

Analysts believe that Singapore’s housing markets may finally have reached their peak. Private home prices are flattening and rents will fall for the first three years during the fourth quarter 2023.

The Urban Redevelopment Authority released data on Friday, Jan 26 showing that prices for private residential properties increased by 2.8% in Q4 2023. The updated Q4 index was slightly higher than the flash estimate of 2.7% by the agency earlier in this month and followed a rise of 0.8% in the previous quarter.

Rents are expected to be pushed down by the number of projects that have been completed and the softer leasing market. In a rental market that is slowing, landlords will not pass on the higher tax burden to tenants.