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In a testament to its resilience and unwavering local demand, Singapore’s real estate market has continued its upward trajectory, marking a second consecutive quarter of price increases despite government-imposed cooling measures.
The preliminary estimates released by the Urban Redevelopment Authority reveal that private residential prices surged by 2.7% in the last three months of 2023, building upon the 0.8% gain witnessed in the previous quarter. Furthermore, this surge resulted in an annual price growth of 6.7% for the entire year, albeit at a slightly slower pace compared to the 8.6% rise observed in 2022.
Singapore’s Unwavering Real Estate Resilience
Singapore stands as a prominent exemplar of a robust and pricey property market, consistently defying the challenges posed by rising interest rates that have caused disruptions in other global cities, including its rival, Hong Kong. The market’s momentum persisted throughout the fourth quarter, with a recent property launch in the western suburbs achieving record prices for the area.
Alan Cheong, the Executive Director of Research at Savills Plc, noted that the project’s strategic location, close to public transportation and devoid of new private developments, contributed to its strong pricing performance. While demand is no longer akin to a hurricane, it continues to exert a significant influence on the market.
In response to surging demand, Singaporean authorities have implemented measures to temper it and ensure housing affordability. These efforts include doubling the foreign buyers’ stamp duty to 60% in April of the previous year and actively increasing the supply of land for private housing to the highest levels seen in a decade.
Market Correction and Future Outlook
Notwithstanding the recent surge in prices, transaction volumes experienced a 27% decline in the fourth quarter compared to the previous three months, culminating in a 15% year-on-year decrease for 2023, marking the lowest figure since 2016. Additionally, domestic mortgage rates are currently at elevated levels, further signaling a potential slowdown in the market.
Analysts anticipate subdued price movements in 2024, with Bloomberg Intelligence predicting a period of price stability, albeit with some downside risk. Conversely, Morgan Stanley offers a more conservative outlook, forecasting a 3% decline in property prices for the year.
Singapore’s real estate market has demonstrated its resilience in the face of economic fluctuations and government interventions. While challenges loom on the horizon, it remains a noteworthy case study of a thriving property market supported by unwavering local demand.
