Housing prices unlikely to sustain momentum of past three years: Desmond Lee
After a high of 43,000 new houses accomplished in 2023, another 28,000 are arranged for completion this year, and an added 24,000 in 2025. The overall range of public and personal homes finished from 2023 to 2025 is merely under 100,000 units.
The BTO application price among first-timer whole families for all flat varieties in 2023 was 1.9, beneath the pre-pandemic rate of 3.7 in 2019.
The balance in deal amount and rate growth is anticipated to continue in 2024, affecting existing and prospective buyers, says Lee. “As PM Lee highlighted in his New Year’s message, we must be planned for our outside atmosphere to become much less beneficial in the upcoming years.”
Lee, therefore, closes out that real estate costs are unlikely to sustain the force they have observed in the past 3 years. “So, I encourage customers to be smart in their investments to refrain from exhausting themselves,” he cautions.
In a similar way, HDB resale prices increased by 4.8%, less than half the 10.4% raise in 2022. The proportion of resale flat customers that paid cash-over-valuation (COV) even decreased significantly in 2023, halving to 15% in 4Q2023 from just about 30% in 4Q2022. For this reason, most HDB resale customers did not need to pay COV.
The state increase the building and construction of new Build-To-Order (BTO) and private housing units to stabilize requirement and supply. Near 21,400 HDB apartments and 21,300 exclusive real estate units were completed in 2023, yielding 43,000. Lee indicates that it is the largest amount of homes finished across both the HDB and exclusive industry in a given year – since 2018.
Residential home mortgage prices are right now in between 3.7% and 4.4% and are expected to remain elevated for an extensive time frame. Lee includes that it will influence existing homeowners, possible property buyers, and overleveraged and debt-laden companies.
Property prices have also regulated, Lee observes. Based upon the 4Q2023 flash estimates, the private residential consumer price index improved at a slower rate of 6.7% in 2023, matched up to 8.6% in 2022.
Geopolitical worries continue to weigh on the international economic climate, and Singapore will not be immune to these effects, tells Lee.
He adds that demand for exclusive and public residential markets has revealed signs of moderating, and purchase quantities have actually decreased. The complete number of exclusive real estate and HDB resale sales have fallen by about 13% and 4%, each, in 2023, contrasted to 2022.
In his opening address at the Building & Construction Authority-Real Estate Developers’ Association of Singapore’s Built Environment and Property Prospects Seminar on Jan 15, Desmond Lee, Minister for National Development and Minister-in-Charge of Social Services Integration, states that remarkable disruptions caused by the pandemic within the past 4 years have led to a strict housing supply amid solid need for housing.
