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

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

Lee, therefore, concludes that housing rates are less likely to sustain the force they have seen in the former 3 years. “So, I motivate customers to be prudent in their investments to avoid stressing themselves,” he warns.

Geopolitical uncertainties remain to weigh on the worldwide economic climate, and Singapore will certainly not be immune to these effects, warns Lee.

Similarly, HDB resale costs increased by 4.8%, less than half the 10.4% increase in 2022. The proportion of resale flat customers that paid for cash-over-valuation (COV) also decreased dramatically in 2023, halving to 15% in 4Q2023 from just about 30% in 4Q2022. Thus, most HDB resale buyers did not have to pay COV.

He includes that demand for private and public non commercial markets has actually revealed indications of moderating, and purchase quantities have actually lowered. The overall number of private housing and HDB resell transactions have already fallen by around 13% and 4%, each, in 2023, compared 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 unmatched disruptions brought on by the pandemic within the previous 4 years have actually resulted in a tight real estate supply amid solid need for mortgage.

Property prices have actually also moderated, Lee spots. Based upon the 4Q2023 flash estimates, the private household price index raised at a slower pace of 6.7% in 2023, matched up to 8.6% in 2022.

After a high of 43,000 brand-new houses finished in 2023, one more 28,000 are scheduled for completion this year, and an extra 24,000 in 2025. The complete range of public and private homes completed from 2023 to 2025 is just under 100,000 units.

The Botany at Dairy Farm condo price

The authorities ramped up the building of brand-new Build-To-Order (BTO) and exclusive real estate units to stabilize need and supply. Near 21,400 HDB apartments and 21,300 exclusive real estate units were finished in 2023, totalling 43,000. Lee notes that it is the greatest amount of residences finished throughout both the HDB and nonpublic industry in a certain year – as 2018.

Domestic mortgage prices are right now between 3.7% and 4.4% and are anticipated to stay high for a prolonged duration. Lee includes that it will impact existing homeowners, potential buyers, and overleveraged and debt-laden companies.

The balance in purchase volume and rate development is expected to continue in 2024, impacting existing and prospective homebuyers, claims Lee. “As PM Lee emphasize in his New Year’s message, we must be readied for our outside atmosphere to become less good in the upcoming years.”


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