Tricia song, CBRE’s head of Singapore and South-east Asia’s research, said that new launches for private residences are typically lower than they were last year, due to buyer fatigue, and resistance towards high prices.

URA statistics showed developers had launched 2,805 units unfinished private residential units to be sold in Q3, compared with 2,374 units the quarter before. But the total number of private houses they sold in Q3 fell by 8.5 percent to 1,946 from 2,127.

These 2,900 transactions were also 2.6% less than the 2,976 in the Q1 quarter. The share of resale sales in Q3 was 55.8 percent, slightly higher than its previous 55.2 percent.

Nicholas Mak of Mogul.sg is the chief research officer. He expects that this year, the number of units of private housing sold on the secondary and primary markets will be between 18,300 to 19,300. This figure is lower than last year’s 21,890.

He attributes this drop to “growing challenges for the residential market in coming months”. These include a weakened rental market and rising inventories.

URA’s total rental index for privately owned homes increased by 0.8 percent quarter over quarter during Q3. It was a lower quarter-on quarter increase than gains of 2.8% for Q2 or 7.2% in first quarter.

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In the past year, this index increased by 19.3%.

Singapore’s third-quarter private housing data shows signs of price stabilisation. High interest rates, cooling policies and cautious economic sentiments have all contributed to the decline in demand.

There is some evidence of balance in the market for leasing, too. Rental growth has moderated, and there have been a lot more housing completions, particularly in Q3.

Market observers are embracing the notion of price stabilisation, despite the 0.8% quarterly increase in the Urban Redevelopment Authority’s (URA’s) private home index during Q3 2023. It was more than the URA flash estimate of Oct 2, which showed a 0.5 percent increase. This contrasts to the drop in price of 0.2 percent quarter on quarter that occurred in Q2 2023 following the implementation of the latest cooling measures for property.

Since a single year ago, this benchmark index now has an increase of 4.4%. It may not seem in line with the recent softness on macroeconomics and geopolitics.

Knight Frank Singapore Research Head Leonard Tay, however, put the situation in context: “URA’s total private home price indicator for Q3 of 2023 shows a 3.9% gain over Q4 of 2022. The projected increase for 2023 is in the range of 4-plus%. The price increase would have been a considerable slowdown after increases of 10.6 in 2021 and 8.6 in 2021.

URA’s total private rental index increased by 29,7% in the last year following a 9.9% increase in 2021. Rentals surged due to the sharp decline in housing completions caused by Covid related construction interruptions, and disruptions of global supply chains.

URA data shows that the rate of vacancies for private houses rose from 6.3 percent in Q2 2022 to 8.4 percent at Q3’s end.

Rent growth was slower in Q3 2020, but the increase in housing completions in this period – 8,517 units – brought the total of the first nine month to 15,883 homes.

In addition to the 3,167 homes that are scheduled for completion during Q4 of 2023 the total number is projected at 19,050 homes, which would represent the highest figure since 2016 when 20,803 houses were completed.

A further sign of market stabilisation is the 3.5% decline in total private housing sales from the 5,388 homes in the Q3 of 2023 to 5,201 houses in the third quarter of 2023. The resale and developer markets both declined. However, the sub-sale sales volume rose from 285 to 355 in Q3 of 2023.

Cushman & Wakefield Wong Xian Yang’s research on Singapore and South-east Asia said: “Overall, sales have been tempered, as buyers are more price-sensitive and selective due to a convergence of factors including elevated financing costs and a variety of new launches in the pipeline. Recent cooling measures, economic uncertainties, and a range of other factors also contributed. Some buyers have been waiting for a price drop in hopes of lowering their costs.

URA noted that rent increases had moderated in the four previous quarters. In fact, the Q3 2023 increase of 0.8 % was the smallest quarterly gain since the 4th quarter 2020.

Tay from Knight Frank says that the rental market will fluctuate between minus one per cent to plus one per cent over the coming quarters.

CBRE Song expects the rents at CBRE to begin to decline in the coming quarters. Mak expects URA to continue expanding its rental index by 11-13% this year. By 2024 it may start to decline and could post an annual drop between 6 percent to 12 percent.

The rental market has become a tenants’ market, he said.

Based on the expected completion dates that developers have reported to authorities, it is estimated that 9,875 homes will be finished next year.

Mak said: “As many private and government housing units will be built in the next few months, some local residents, who are renting accommodation while they await their new home, might not renew their rental agreements.”

CBRE Song said, “The demand for expatriates could be moderated as businesses restructure their operations and reduce hiring in the face of challenging economic conditions”.