Overall private residential prices rise by around 10% in 2022, similar to 2021. The resale market will trade at around 14,000 units as interest rate increases are likely to drive some buyers out of the market.
The supply of new homes will pick up in 2023, with over 40 new developments expected to be launched, with a total number of units ranging from 10,000 to 12,000.
Based on the estimated units, 20% will be in the core Central District, 50% in the other Central Districts and 30% outside the Central District.
Several major projects to be launched in the first quarter of 2023 should receive an enthusiastic response from the market. They include 8 Shenton Way, Blossoms by the Park, Jalan Tembusu, Lentor Hill Residences, Marina View, Newport Residences, King's Court, Terra Hill, The Botany at Dairy The Farm, The Continuum, The Hill@One-North and The Reserve Residences.
King's Court will be launched for sale in January. Blossoms by the Park and Terra Hill are next.
8 Bukit Batok West Avenue may be the only condominium project to be executed in 2023.
The resilience of the local property market to high interest rates is in stark contrast to the unstable house prices in many cities around the world, probably due to low local speculative activity and very good market liquidity. A strong property market is likely to attract more interest from overseas buyers.
High interest rates are unlikely to affect new home sales, as loans are paid for in stages. The new home market is likely to see sales of between 9,000 and 10,000 units, supported by more new home launches.
The resale market could slow further to around 12,000 units. Higher interest rates will continue to affect the resale market and cooling measures will further stabilise demand from HDB upgraders. Prices are unlikely to fall because speculative demand is low and buyers can afford to pay more for their mortgages from higher interest rates.
Job cuts in the tech sector will ease pressure on other companies that are struggling to fill tech jobs in 2022. This is unlikely to have an impact on the property market.
Recent government land (GLS) tenders in other central districts have stabilised at around S$1,300 per square foot, while outside the central districts prices have stabilised at around S$1,100 per square foot. This means that the selling prices are likely to remain stable in the future as well. On the other hand, higher construction costs and a low inventory of unsold homes could lead to a price increase of around 5% in 2023.