Private property market in the city fringe to outperform in 2023 and remain resilient

The supply of new homes is likely to increase in 2023 but analyst says Singapore’s private property market will remain resilient.

Market prices are likely to increase however it will be supported by the quality of new homes being released for sale. These new homes will entice home owners who are looking to upgrade their lifestyle and increasing their property portfolio. Demand is also likely from foreigners who are attracted to Singapore’s safe environment.

Supply in the pipeline in the year 2023

An estimate of the overall supply of new homes could be from 10,000 to 12,000 units. It is spread over 40 new condominiums in the year 2023 alone according to the article in Business Times 28th Dec 2022. 50% of the new condominiums being launched will be located in the RCR (rear core region), 30% will be in the mass market OCR (outside central region and the rest in the core central region of Singapore or better known as the city centre.

An outstanding amount of the new homes launched will be the large projects in the RCR such as the ones on Jalan Tembusu and Katong areas, (The Continuum) . An estimated median price of around $2,200 to $2,400 psf. The article also pointed out that it is very rare to have large projects of 600 to 800 units. And they predicted that once being launched the property market will move.

Other areas analysts identified that may also see further price increment includes district 5; in the areas such as West Coast, Pasir Ris and Clementi. District 16; Bedok and Upper East Coast. They include new condominium slated for launch after the Lunar New Year, Sceneca Residences by MCC Land at Tanah Merah Link  and Blossoms by the Park by EL Development located at Slim Barracks Rise (Buona Vista) and The Reserve Residence at Jalan Anak Bukit by Far East Organisation and Sino Group.

Price increment in other parts of Singapore

The rest of Singapore market in District 26 ( Mandai and Upper Thomson) could also see an increase in prices due to new launches in the area. Properties such as Lentor Hills Parcel A, that plot of land that which was sold in the Government Land Sales (GLS) site. Which saw consortium Guocoland, TID Realty and Hong Leong getting the highest bid. Lentor Hills parcel B was sold in the last quarter of 2022.

The recent almost sold out launch on Amo Residences at Ang Mo Kio has set a new high in Ang Mo Kio. Property experts suggested that developers will ride on the new benchmark price set by Amo Residences, Lentor Modern and Sky Eden@ Bedok at $2200psf.

As a comparison of the transacted prices of these 3 new launches mentioned above, Sky Eden@ Bedok had a median price of $2118psf, Amo Residences averaging $2100psf, Lentor Modern at Lentor Circle by Guocoland fetched a price of $2108psf.

Predicting that prices of  Singapore’s new homes will stay firm as lack of prominent new launches in the Core Central Region. One large project that will be coming up in the CCR will the the site at Marina View which will be developed by IOI properties. Experts forecasted that prices might start from about $3000psf.

Positive outlook for 2023

Strong market performance in 2022 points to a positive outlook for the year 2023. In the first 9months of 2022, the price of non landed private residential homes risen to 8.2%. The increment was fuelled by the higher prices of new residential condominiums in the OCR and RCR which saw and increase of 9.8% and 9.4% respectively. Historical data shows that in general private properties in these location grows at a faster pace.

Increase in housing prices in the RCR and OCR is usually seen when demand is relative to supply. This effect is felt due to upgraders and those who have just started their progressive asset accumulation journey. The buyers demand is buoyant and responding to changes in salary or change in HDB prices and policies.