New home prices to increase at ‘more sustainable pace’

Experts expect price growth to come at 4% to 6% for the whole year.

Prices of private homes will likely increase at a “more sustainable pace” in 2023, given the macroeconomic headwinds and tighter financing conditions weighing on housing affordability, according to Lam Chern Woon, head of Research and Consulting at EDMUND TIE.

Lam forecasts home prices to grow by around 4%-6% for the whole year. 

CBRE’s Head of Research for Southeast Asia, Tricia Song, had a similar sentiment, saying that home prices are likely to “flatten out in the next few quarters” due to the cooling measures which took effect on 27 April.

"Barring widespread retrenchments and a sustained recession, a significant price correction is not expected given low unsold inventory and generally healthy household balance sheets,” Song said.

According to Song, private home price growth will likely come at 3%, slower than the 8.6% seen in 2022, due mainly to a weaker economic outlook.

Wong Siew Ying, head of Research & Content at PropNex Realty, on the other hand, believes home prices could remain sticky in the coming months due to transactions being predominantly supported by local buyers who have ample liquidity or those not affected by cooling measures.

“Private home prices in the RCR and OCR – where the unsold supply of launched units is tighter and cater to a bigger pool of owner-occupiers – will likely stay relatively resilient, while the CCR which tends to see more foreign investment interest may see marginal price growth this year. A potential pullback in investment demand among foreigners, especially for CCR homes could present more buying opportunities for Singaporeans and PRs,” Wong commented. 

OrangTee’s Senior Vice President of Research and Analytics, Christine Sun, said buyers also expect prices to rise further given that more buyers may enter the markets amidst the moderation of interest rates.

“Moreover, home prices have continued to rise even after each round of ABSD adjustments, based on historical trends,” Sun added.

Lee Sze Teck, Huttons’ senior director for research, said more launches will also boost prices up to 5% in 2023.