5 Things We Can Expect of The Property Market in 2023

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#1: Interest Rate Volatility

The 1-month SORA (Singapore Overnight Rate Average) has been trending down below 3% in recent weeks. But at over 7%, inflation still creates a lot of uncertainty about how the Fed will act in 2023 or how the economy will fare. The aim is to return inflation to 2%. Homebuyers will likely remain cautious.

#2: Private Residential Prices Expected to Rise

  • High land and constructions costs to the developers
  • Low inventory levels in current market (read our post on 14th December 2022)
  • A significant drop in private homes attaining TOP after 2023, resulting in a supply crunch of completed homes (see below)

Expected Supply Pipeline of New Completed Homes

#3: Increased Supply of New Launch Projects

  • There will be an estimated 6,000 to 8,000 units launched in 2023 as compared to 6,200 units in 2022.
  • We can expect around 40 projects to be launched in 2023 as compared to <20 in 2022.
  • Around 50% of new launches in 2023 are going to be located in RCR (Rest of Central Region).

Upcoming New Launches

#4: Rental Market Likely to Remain Robust

  • Private rents have surged 20.8% year on year as of Q3 2022.
  • Number of private homes obtaining TOP hitting 7 year high of 18,234 units may help alleviate the tight rental market
  • However, rentals may still continue rising as landlords may pass on higher interest costs and property taxes.

#5: Growing Demand From Wealthy Foreigners

  • This study shows that our real estate remains only slightly overvalued, despite the 20% growth since 2020.
  • As a strong business hub and safe haven, Singapore real estate will continue to be wooed by wealthy foreign investors.

Reasons Why The Wealthy Favours Singapore

  • China’s “Common Prosperity” policies has pushed a lot of UHNWI (Ultra-High-Net-Worth Individuals) and HNWI (High-Net-Worth Individuals) to Singapore
  • Singapore has been actively attracting the ultra rich, giving tax incentives to family offices
  • Singapore dollar has a history of being a stable currency for foreigners to park their assets in Singapore
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