Developer sales picked up in the first quarter of 2023 after a seasonal lull in the fourth quarter of 2022. The first quarter of 2023 saw three major new non-land launches -- two outside the Central Region (OCR) and one outside the Central Region (RCR).

Sceneca Residence, located outside the Central District (OCR), recorded excellent sales on its launch day in January, selling 60 per cent of its units. As at end-March 2023, the median ruler price was S $2,084 per sq ft. In February, Terra Hill, located along Yoo Siong Road, another central district, sold nearly 40 percent of its units on the day of its launch. As at 1Q2023, the median price for the project is S $2,695 PSF PSF. The Botany at Dairy Farm, located outside the Central District (OCR), sold almost 50 per cent at a median price of S $2,067 PSF on the day of its launch in March.

Developers are estimated to have sold 1,256 units in the first quarter of 2023, compared to 1,312 units launched. This is 82.0 per cent higher than the 690 units sold in the fourth quarter of 2022. So far, sales of properties launched in 2023 have been strong, indicating that the appetite to invest in real estate remains strong. With unsold units on the market remaining low at 16,464, there is strong support for market prices, thereby giving buyers confidence to enter the market.

Resale market buyers continued to search for more affordable options in the resale condos market, driving the total number of transactions to 2,622 units in the first quarter of 2023. Volume was 2.7% lower than Q4 2022 because of current higher interest rates. The price rose 4.4 percent due to increased demand from local and foreign investors.

In the first quarter of 2023, private rent growth slowed for the second quarter in a row to 7.2%. The increase was mainly driven by landed homes and core central districts (CCRS), which rose 14.5 per cent and 6.4 per cent respectively. A detached house in The Quality House District (GCBA) rents for S $170,000 a month, while a four-bedroom unit in The Marq at Paterson Hill rents for S $100,000 a month. These transactions are likely to be made by UHNWIs who are waiting for permanent resident status to buy their first Singapore property. Buyer's information

Foreign purchases rose 14.2 percent to 258 in the first quarter of 2023, compared with 226 in the fourth quarter of 2022. Given geopolitical tensions, some of them may move to havens such as Singapore. Some of those buyers bought completed projects like Royalgreen, Juniper Hill and Petit Jervois.

Similar to the fourth quarter of 2022, foreign demand accounted for 6.9 percent in the first quarter of 2023. The top five countries buying in Singapore are China, Malaysia, India, the United States and Indonesia.

In 2022 40.7 per cent of property transactions were below S $1.5 million, 25.0 per cent were priced between S $1.5 million and S $2 million, and 34.3 per cent were priced above S $2 million. In the first quarter of 2023, 72.3% of buyers were permanent residents, while local citizens and foreigners accounted for 20.2% and 6.9% respectively.

More than 206 unfinished executive condominiums were sold in the first quarter of 2023 as buyers looked for more affordable homes to upgrade their lifestyles. As of the first quarter of 2023, there are only 419 unsold executive condos left on the market.

The next executive condominium to be launched soon will be Altura in Bukit Batok Avenue 8. With very little inventory of unsold executive condos on the market, the project is expected to be a hit.

According to advance estimates, Singapore's economy slowed to 0.1 per cent quarter-on-quarter in the first quarter of 2023, well below the 2.1 per cent quarter-on-quarter growth in the previous quarter.

With inventories of unsold units low and market liquidity healthy, a slowdown in economic growth is unlikely to affect the property market. The number of unsold units at the first quarter of 2023 was 16,464, 11,303 below the ten-year average of 27,767.

However, a new set of cooling measures for foreigners announced on April 26, 2023 May cause a knee-jerk reaction from buyers in the short term, with demand expected to slow in the next three months. This is to be expected as buyers reassess their finances before making a decision to purchase a property.

Projects aimed at the mass market and urban fringe are likely to continue to be rolled out, as buyers are mainly Singaporeans and permanent residents. To cushion the blow of the new measures, high-end projects aimed at more foreigners are likely to be put on hold.

The cooling measures may have been triggered by the sharp rise in property prices in the first quarter of 2023 and the continued increase in the number of foreigners buying residential properties in Singapore.

The opening of Singapore's borders to the world is one reason for the increase in foreign purchases of residential property. This has prompted more foreigners to relocate to Singapore. The second reason may be due to the relaxation of China's borders in January 2023. Inquiries from Chinese companies and ultra-high net worth individuals wanting to set up headquarters and family offices in Singapore have increased in recent months. Another factor driving the increase in the proportion of foreigners buying is geopolitical tensions. An increase in inquiries from Taiwan's ultra-high net worth individuals seeking to manage and preserve their wealth in Singapore has been reported. There has been a marked increase in the number of Taiwanese buying residential properties in Singapore.

Doubling the extra buyer's stamp duty for foreigners, some of whom want to put down roots here and contribute to the economy, could be seen as a blow. This could be a pre-emptive move to curb the number of high-end homes being sold. Foreigners may rent temporarily while applying for permanent residency or citizenship. Interestingly, some foreigners rent their homes with the intention of buying them when they become permanent residents or citizens. The rental market is set to pick up in the coming months, with rents expected to grow by around 10% in 2023.

This announcement could see more demand in the rental and execution condominium market. Second homes are becoming more expensive for Singapore buyers. As a result, most of them are likely to sell their first property and rent it out in the meantime. Executive condominiums have become more attractive because they are exempt from the additional buyer's stamp duty. The upcoming executive condominium - Altura, located in Bukit Batok Avenue 8, is likely to attract great interest.

Given the small number of unsold units on the market, prices may not fall. What was previously observed during 2018 was that prices consolidated before running for 15 consecutive quarters. Due to higher construction costs and interest rates, developers are expected to sell about 8,000 units in 2023, with prices rising 5 percent.