The Singapore property market has been showing signs of resilience and recovery amid the Covid-19 pandemic and the global economic slowdown. In this article, we will look at some of the latest trends and developments in the residential, commercial, and industrial sectors, as well as the outlook for the rest of the year.
Residential Sector
The residential sector has been the most active and dynamic segment of the property market, with strong demand from both local and foreign buyers, as well as investors and owner-occupiers. According to the latest data from the Urban Redevelopment Authority (URA), private housing prices fell by 0.2% quarter-on-quarter in Q2 2023, the first decline since Q1 20201. However, this was mainly due to a drop in prices of landed properties (-2.8%), while non-landed properties saw a slight increase of 0.1%. The price decline was also uneven across regions, with the Core Central Region (CCR) registering a 0.6% increase, the Rest of Central Region (RCR) a 0.1% decrease, and the Outside Central Region (OCR) a 0.8% decrease1.
Despite the marginal price correction, the transaction volume remained high, with 8,769 private residential units sold in Q2 2023, up by 0.9% from Q1 20231. The primary market accounted for 4,033 units, while the secondary market accounted for 4,736 units1. The demand was driven by several factors, such as low-interest rates, ample liquidity, pent-up demand from previous lockdowns, limited supply of new launches, and improved market sentiment amid the vaccination progress and easing of social distancing measures. Some of the popular new launches in Q2 2023 included One Bernam, Irwell Hill Residences, Midtown Modern, Perfect Ten, and Pasir Ris 8.
The public housing market also saw robust activity, with resale prices of Housing and Development Board (HDB) flats rising by 1.5% quarter-on-quarter in Q2 2023, marking the 13th consecutive quarter of increase2. The resale volume also increased by 6.8% quarter-on-quarter to 7,063 units in Q2 20232. The demand for resale flats was fuelled by several factors, such as the higher cash-over-valuation (COV) amounts, the longer waiting time for new flats, the enhanced housing grants for first-time buyers, and the increased income ceiling for eligible buyers. Some of the most sought-after locations for resale flats included Bishan, Queenstown, Bukit Merah, Toa Payoh and Clementi.
Looking ahead, the residential sector is expected to remain resilient and stable for the rest of the year, as the underlying demand for housing remains strong and supported by favourable macroeconomic conditions. However, there are also some potential risks and challenges that could affect the market performance, such as the uncertainty over the Covid-19 situation and its impact on travel and employment, the cooling measures imposed by the government to curb excessive speculation and price growth, and the rising competition from other regional markets that offer attractive investment opportunities.
Commercial Sector
The commercial sector has been gradually recovering from the impact of the Covid-19 pandemic and its associated restrictions on business operations and consumer activities. According to the latest data from URA, office rents in the Central Business District (CBD) increased by 0.2% quarter-on-quarter in Q2 2023, after falling by 0.5% in Q1 20233. The office occupancy rate also improved slightly from 93.3% in Q1 2023 to 93.5% in Q2 20233. The office market was supported by several factors, such as the limited supply of new office space in the CBD, the gradual return of workers to their workplaces amid the vaccination rollout and easing of work-from-home arrangements, and the continued demand from sectors such as technology, e-commerce, healthcare, and professional services.
Retail rents in the CBD also ended five consecutive quarters of declines with a 0.3% quarter-on-quarter increase in Q2 20234. The retail occupancy rate also rose from 91.5% in Q1 2023 to 92.4% in Q2 20234. The retail market was buoyed by several factors, such as the reopening of malls and shops after the phase two (heightened alert) period in June 2023, the pent-up demand from shoppers who were eager to resume their spending habits, the festive sales and promotions during Hari Raya Puasa and Great Singapore Sale, and the increased footfall from domestic tourists who were unable to travel overseas due to the travel restrictions.
Looking ahead, the commercial sector is expected to continue its recovery path for the rest of the year, as the economy rebounds from the recession and consumer confidence improves. However, there are also some potential risks and challenges that could affect the market performance, such as the uncertainty over the Covid-19 situation and its impact on business and consumer activities, the structural changes in the office and retail sectors due to the adoption of digitalization and hybrid work models, and the oversupply of commercial space in some submarkets and locations.
Industrial Sector
The industrial sector has been showing signs of resilience and stability amid the Covid-19 pandemic and its impact on the manufacturing and logistics sectors. According to the latest data from JTC Corporation, industrial rents increased by 0.1% quarter-on-quarter in Q2 2023, after remaining unchanged in Q1 20235. The industrial occupancy rate also increased from 89.4% in Q1 2023 to 89.6% in Q2 20235. The industrial market was supported by several factors, such as the strong performance of the biomedical manufacturing, electronics and precision engineering clusters, the increased demand for warehouse and logistics space from e-commerce and online retail activities, and the limited supply of new industrial space in the pipeline.
Looking ahead, the industrial sector is expected to remain resilient and stable for the rest of the year, as the manufacturing and logistics sectors continue to benefit from the global economic recovery and trade flows. However, there are also some potential risks and challenges that could affect the market performance, such as the uncertainty over the Covid-19 situation and its impact on supply chains and production activities, the rising costs of raw materials and labor, and the competition from other regional markets that offer lower-cost alternatives.
Conclusion
The Singapore property market has been demonstrating its resilience and recovery amid the Covid-19 pandemic and its impact on various sectors of the economy. The residential sector has been the most active and dynamic segment of the market, with strong demand from both local and foreign buyers, as well as investors and owner-occupiers. The commercial sector has been gradually recovering from the impact of the pandemic and its associated restrictions on business operations and consumer activities. The industrial sector has been showing signs of resilience and stability amid the pandemic and its impact on the manufacturing and logistics sectors. The outlook for the property market for the rest of the year remains positive, as the economy rebounds from the recession and consumer confidence improves. However, there are also some potential risks and challenges that could affect the market performance, such as the uncertainty over the Covid-19 situation and its impact on various sectors of the economy, the cooling measures imposed by the government to curb excessive speculation and price growth, and the rising competition from other regional markets that offer attractive investment opportunities.
I hope you enjoyed reading my blog article about the latest property news in Singapore. Please let me know if you have any feedback or questions. Thank you!
