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Property Herald - Different Strokes For Different Folks: A Private Property Market Analysis

Nicholas Mak provides a different outlook for different segments of private housing market based on the recently released property transaction data and property cooling measures.


How will the latest April 2023 cooling measures impact the private property market in Singapore?
How will the latest April 2023 cooling measures impact the private property market in Singapore?

Overall private residential prices recovered in 1Q 2023

The Singapore private residential property price index resumed its upwards trajectory in 1Q 2023, increasing by 3.3% quarter-on-quarter (qoq). It appears that the impact of the market cooling measures implemented in September 2022 was short-lived, as it slowed down the rate of property price growth only in the fourth quarter of last year to 0.4% qoq.

Prime residential property prices have yet to recover

By the first quarter of 2023, the high-end Core Central Region (CCR) non-landed housing price index has not fully recovered from the impact of the September 2022 cooling measures. In the past two quarters, the CCR price index expanded at the quarterly rate of less than one percent. In 1Q 2023, non-landed housing prices in the CCR grew 0.8% yoy, the slowest price growth among the three market segments.

Property in prime districts such as district 9 have yet to recover from the September 2022 cooling measures. (Credit: KG Tan, MOGUL.sg)
Property in prime districts such as district 9 have yet to recover from the September 2022 cooling measures. (Credit: KG Tan, MOGUL.sg)

The mid-tier and mass-market housing segments have largely recovered from the effects of the September 2022 property curbs in 1Q 2023. As the share of the total property transactions of each of these two segments are larger than the market share of the CCR, the price recovery in these two segments would have a significant effect on the overall property market prices. This could be a contributing factor for the government market intervention this week.

Landed housing prices are hot

Among all the residential property sub-markets, the landed housing price index increased the most at 5.9% qoq in the first quarter of this year. This is the fastest rate of growth for landed property prices since 1Q 2021 when the index rose by 6.7% qoq.


Foreigners are restricted from buying landed housing in Singapore. The rapid price growth of this housing type shows that even without foreign buyers, the prices of landed housing are still growing robustly.

This calls into question the effectiveness of the latest round of property cooling measures, which was introduced yesterday to control the price appreciation of private residential properties. The cooling measures would largely discourage foreign demand for local housing by doubling the Additional Buyer’s Stamp Duty (ABSD) for foreign buyers from 30% to 60% of the price of the property.

Residential rentals are even hotter

The private housing rental rates continue to increase at a breakneck speed of 7.2% qoq in 1Q 2023. Compared to the corresponding period a year ago, it surged by 33.4%, which is the highest rate of expansion in the past 15 years.


Residential property rental is a thriving market at the current moment.
Residential property rental is a thriving market at the current moment.

The landed housing segment took the top prize for the fastest rental growth of 14.5% qoq in the first quarter of this year, which is the highest quarterly rate of rental appreciation since the start of the landed housing rental index in 1998.

Upcoming supply

For the rest of this year, an estimated 14,700 private housing units (excluding Executive Condominiums) are expected to be completed. This would bring the total number of private housing units completed this year to 17,690, the highest amount of new housing supply since 2016. Another 10,500 private housing units are expected to be completed next year.

Some of these residential units would be offered for rental, which could help to cool the red-hot leasing market.


With expected slower economic growth and softer job market, the growth of the number of foreign tenants in Singapore could ease. However, the latest round of cooling measures alongside punitive taxes could force certain potential foreign homebuyers to rent their accommodation. The overall result is that residential rental rates could continue to increase at least the next two quarters. However, residential rental may increase at a more gradual rate due to the steady supply of new housing that would be completed in the next two years.

For the whole of 2023, residential rentals could increase by 17% to 23% yoy, while prices of private housing would grow at a more moderate rate of 6% to 10% yoy.

Effects of the latest cooling measures

The impact of the latest round of property cooling measures on the overall residential property price index is likely to last no more than one quarter because the increase in the ABSD will only affect about 10% of the sales transactions.

The CCR private housing market attracts proportionally more foreign buyers than the other two market segments. As a result, the latest round of cooling measures are expected to affect the prime market segment more than the other sub-markets. Hence, the CCR non-landed property price index is projected to grow at less than one percent for the rest of this year.


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