Private home prices up 2.8% in Q4, but rents fall 2.1% amid more housing completions, softer demand in 2024

Published: Jan 27, 2024 by 
PropertyGiant Singapore
The 8.7 per cent rental growth in 2023 is significantly slower than the 29.7 per cent surge in 2022. PHOTO: CHERYL ONG, BT
The 8.7 per cent rental growth in 2023 is significantly slower than the 29.7 per cent surge in 2022. PHOTO: CHERYL ONG, BT

SINGAPORE’S housing market may have finally reached its peak, said analysts, with private home prices flattening out and rents falling for the first time in three years in the fourth quarter of 2023.

Data released by the Urban Redevelopment Authority on Friday (Jan 26) showed that the prices of private residential properties rose 2.8 per cent in Q4 of 2023. The updated Q4 price index was a tad higher than the 2.7 per cent flash estimate by the agency earlier this month, and followed an increase of 0.8 per cent in the previous quarter.

For the year, prices were up 6.8 per cent. While this is the seventh straight year of price growth, it is also a more “measured pace” compared with the 8.6 per cent increase in 2022 and 10.6 per cent rise in 2021, said Lee Sze Teck, Huttons’ senior director of data analytics.

Rents, meanwhile, fell 2.1 per cent in Q4 and registered 8.7 per cent growth for the year, significantly slower than the 29.7 per cent surge in 2022.

Christine Sun, OrangeTee and Tie’s chief researcher and strategist, attributes the slowdown in price growth to elevated interest rates, multiple rounds of cooling measures over the years and slower overall demand.

“The imbalance of robust demand overwhelming an undersupplied market has (also) been rectified by the end of 2023,” said Knight Frank research head Leonard Tay, pointing to the 21,300 private units, including executive condominiums (ECs), that were completed last year.

Excluding ECs, some 19,968 private homes were completed in 2023 – the largest number of completions since 2017’s 20,648 units, said Tricia Song, CBRE’s head of research for Singapore and South-east Asia.

Cushman & Wakefield’s head of research, Wong Xian Yang, added that this is significantly above the decade-long annual average of 12,600 units.

The majority of completions – at 8,517 units – were recorded in Q3, while Q4 saw fewer completions of just 4,085 units. Vacancy rates consequently fell to 8.1 per cent as at the end of Q4, from 8.4 per cent in Q3.

This resulted in the overall rental index falling 2.1 per cent in Q4, the first decrease in over three years.

It is also the largest quarterly decline in rent since Q2 2009, when rents dropped 5.2 per cent following the global financial crisis the previous year, noted Chia Siew Chuin, JLL Singapore’s head of residential research.

“With the surge in new home completions, homeowners who were temporarily displaced due to construction delays can now exit the leasing market and move into their newly completed homes,” said Chia. “Concurrently, prospective tenants now have the upper hand in lease negotiations, on the back of an increase in leasing options.”

Full-year tally

Percentage changes in URA private home price and rental indices


Landed properties led the rise in home prices in the last quarter, climbing 4.6 per cent in a reversal from the 3.6 per cent decline in Q3. For the year, landed home prices rose 8 per cent, slowing slightly from gains of 9.6 per cent in 2022.

Prices of non-landed properties rose 2.3 per cent in Q4 2023, versus the 2.2 per cent rise in the previous quarter. For the whole of last year, non-landed home prices grew 6.6 per cent, moderating from 8.1 per cent in 2022.

In the primary market, developers launched 1,060 private homes, excluding ECs, for sale in Q4, less than half of Q3’s 2,805 units. Still, a total of 7,551 units were launched for sale in 2023, compared with 4,528 units in 2022.

New sales volumes consequently fell 43.9 per cent to 1,092 units in Q4, from 1,946 units in Q3. For the whole of 2023, 6,421 units were sold, down from 7,099 units in the previous year.

Resale transactions, on the other hand, saw stable activity in Q4, said CBRE’s Song, with 2,831 units sold, slipping 2.4 per cent from Q3’s 2,900 units. These deals accounted for 65.3 per cent of all sales transactions in Q4, higher than 55.8 per cent in Q3.

In total, there were 11,329 resale transactions in 2023, compared with 14,026 units transacted in 2022.

The constrained transaction volumes are mainly due to the rising prices of resale homes and high interest rates, said Lee of Huttons. The median prices of resale homes climbed 2.8 per cent in Q4, with new project launches achieving higher prices, he said. For the year, median prices grew by 8.8 per cent.

Investor demand has also dipped following the hike in Additional Buyer’s Stamp Duty, with most homes being bought for either occupation or long-term rental income, said OrangeTee’s Sun.

In the coming year, 11,793 private homes, including ECs, are expected to be completed. Another 6,747 units will be ready in 2025.

Altogether, around 18,500 units are due to be completed between 2024 and 2025. With the 21,284 units completed in 2023, close to 100,000 public and private housing units will be completed between 2023 and 2025.

Prices are likely to remain high yet stable in H1 2024, amid geopolitical uncertainties and the continued high interest rate environment, said PropertyGuru Singapore country manager Tan Tee Khoon. “Demand, while subdued, should maintain a consistent upward trajectory.”

Analysts therefore expect prices to grow 3 to 5 per cent in 2024.

Meanwhile, the high number of project completions and softer leasing demand are likely to press down on rents, said JLL’s Chia. “Despite a higher property tax burden in 2024... landlords are highly unlikely to pass the increase in property tax to tenants in a slowing rental market.”


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