The 2022 annual real estate data released by the Urban Redevelopment Authority of Singapore and the Housing and Development Board on January 27 showed that the prices of private homes for sale in Singapore have risen for six consecutive years, but at a slower rate.
In particular, the year-on-year rise of 8.6 per cent in 2022 was lower than the 10.6 per cent rise in 2021, while HDB resale prices rose by 10.4 per cent year-on-year, lower than the 12.7 per cent rise in 2021. This indicates that the property control policies adopted by the government last year are beginning to bear fruit.
Data from the Urban Redevelopment Authority showed that the overall private home price index was 188.6 in the fourth quarter of 2022, up from 187.8 in the third quarter; non-landed private home prices rose 0.3 per cent in the fourth quarter, down from a 4.4 per cent increase in the third quarter, and 8.1 per cent for the year; landed private home prices rose 0.6 per cent in the fourth quarter, down from a 1.6 per cent increase in the third quarter, and 9.6 per cent for the year.
HDB data showed that the HDB resale price index was 171.9 in the fourth quarter of 2022, up 2.3 per cent year-on-year and higher than the previous estimate of 2.1 per cent.
The fourth quarter was the smallest quarterly increase in HDB resale prices in the past year and the lowest quarterly increase since the 1.5 per cent rise in the third quarter of 2020, due to the government's cooling measures and high interest rates.
In 2022, HDB resale prices rose by 10.4 per cent year-on-year, which was lower than the 12.7 per cent increase in 2021 but still higher than the 5 per cent increase in 2020. HDB resale prices have risen for 11 consecutive quarters and the HDB Resale Price Index is at an all-time high.
In terms of HDB resale transactions, 27,896 units were sold in 2022, down from 31,017 units in 2021, a 10.1 per cent drop in the number of transactions. The drop in transaction volume is mainly related to factors such as some resellers holding a wait-and-see attitude to postpone selling as they see prices continue to rise.
For rentals, rental prices rose significantly for all types of housing, with housing rents in some areas climbing significantly and overall rents showing increases of 20% to 30%. The main reasons for the sharp rise in housing rents include the influx of foreign workers and businesses, rising interest rates and high inflation levels.
According to a Savills research report released in November last year, the opening of Singapore's borders to attract more expatriates, coupled with the return of overseas students, led to an 8.6% year-on-year increase in the rental index for both landed and non-landed private homes in the third quarter. This was the highest increase since the third quarter of 2007 and the eighth consecutive quarterly rise.
The study shows that rental prices for both landed and non-landed homes reached their highest levels since 1998 in the third quarter of 2022, rising by 10.9 per cent and 8.3 per cent year-on-year respectively, while the number of rental transactions reached 25,382 units, up 20.5 per cent and the highest since 2020.
In terms of private rental volumes, after three quarters of decline, lease transactions rebounded in the third quarter of 2022, up 20.5 per cent sequentially, the highest increase since the third quarter of 2020.
HDB rents also climbed sharply, with an average increase of around 25 per cent in 2022 and nearly 30 consecutive months of increases. Rental increases in mature HDB areas were significantly higher than those in non-mature HDB areas.
For industrial properties, the Jurong Group's (JTC) Industrial Property Market Report for the fourth quarter of 2022, released on 26 January, showed that prices and rents rose by 7.5 per cent and 6.9 per cent year-on-year respectively. Although there is an oversupply of local industrial properties, it did not affect the nine consecutive quarters of price and rental increases.
To curb the overheated property market, the Singapore government launched its latest round of property cooling measures on 29 September 2022, reducing the amount of borrowing for home buyers and requiring private home owners to wait 15 months after selling their homes before they can buy resale HDB flats.
This year, the government has again made it clear that it will strive to increase HDB and private housing construction to boost supply, and will continue to closely monitor the property market and take proactive measures to stabilise property prices.
Analysis by Singapore real estate experts suggests that the continued high inflow of foreign workers and settlers and businesses, increased rigid demand from local first-time buyers and private downgrades, the implementation of GST and property tax hikes and the government's property cooling measures prompting potential buyers to temporarily shift to the rental market will support the continued rise in property prices and housing rents in 2023.
The market is generally predicting that in 2023, private property prices, HDB resale prices, industrial housing prices, and housing rents in the Singapore property market will continue to gain momentum, with the rate of price and rental increases likely to be narrower than in 2022.