Housing prices unlikely to sustain momentum of past three years: Desmond Lee

The BTO application rate among first-timer families for all flat types in 2023 was 1.9, less than the pre-pandemic rate of 3.7 in 2019.

Property rates have likewise regulated, Lee spots. Based upon the 4Q2023 flash estimates, the exclusive household consumer price index boosted at a reduced rate of 6.7% in 2023, matched up to 8.6% in 2022.

In a similar way, HDB resale rates raised by 4.8%, less than half the 10.4% grow in 2022. The percentage of resale flat purchasers who paid for cash-over-valuation (COV) also decreased significantly in 2023, cutting in half to 15% in 4Q2023 from practically 30% in 4Q2022. For this reason, most HDB resale customers did not have to pay for COV.

The state ramped up the construction of new Build-To-Order (BTO) and nonpublic housing units to balance interest and supply. Around 21,400 HDB apartments and 21,300 exclusive housing units were finalized in 2023, totalling 43,000. Lee notes that it is the greatest range of houses finished across both the HDB and private industry in a given year – ever since 2018.

Geopolitical uncertainties continue to weigh on the global economic situation, and Singapore will not be unsusceptible to these impacts, warns Lee.

After a high of 43,000 new residences finished in 2023, one more 28,000 are arranged for finish this year, and an added 24,000 in 2025. The complete number of public and private homes completed from 2023 to 2025 is merely under 100,000 units.

Domestic home mortgage rates are right now between 3.7% and 4.4% and are expected to stay strong for an extended duration. Lee includes that it will influence existing homeowners, possible homebuyers, and overleveraged and debt-laden companies.

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, mentions that unprecedented disturbances caused by the pandemic over the previous 4 years have indeed resulted in a strict housing supply in the middle of solid demand for mortgage.

Klimt Cairnhill Low Keng Huat

He adds that demand for private and public non commercial markets has revealed indicators of moderating, and transaction quantities have actually lowered. The complete number of exclusive housing and HDB resell transactions have dropped by around 13% and 4%, each, in 2023, compared to 2022.

Lee, consequently, concludes that real estate rates are unlikely to sustain the force they have actually observed in the former 3 years. “So, I encourage purchasers to be sensible in their investments to refrain from overextending themselves,” he warns.

The moderation in deal amount and cost development is anticipated to proceed in 2024, impacting occurring and prospective buyers, claims Lee. “As PM Lee emphasize in his New Year’s message, we ought to be prepared for our external environment to become less good in the upcoming years.”


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