(Singapore, 3 April 2023) The sales transaction volume of Singapore’s private residential property fell by 8% while non-landed private residential properties in all areas island-wide increased by at least 1% during the first quarter of this year, the Urban Redevelopment Authority announced in its flash estimate of the price index for private residential property for 1st Quarter 2023 today.

Overall, the private residential property index increased by 6.0 points from 188.6 points in 4th Quarter 2022 to 194.6 points in 1st Quarter 2023. This represents an increase of 3.2%, compared to the 0.4% increase in the previous quarter.

Sale transaction volume fell by about 8% on a quarter-on-quarter basis and by about 38% on a year-on-year basis in 1st Quarter 2023.

Prices of non-landed private residential properties in the Core Central Region (CCR) increased by 1.0%, compared to the 0.7% increase in the previous quarter. Prices in the Rest of Central Region (RCR) increased by 4.0%, compared to the 3.1% increase in the previous quarter. Prices in the Outside Central Region (OCR) increased by 1.9%, compared to the 2.6% decrease in the previous quarter.

The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up till mid-March. The statistics will be updated on 28 April 2023 when URA releases its full set of real estate statistics for 1st Quarter 2023.

Past data have shown that the difference between the quarterly prices changes indicated by the flash estimate and the actual changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution.

According to Prof Cristian Badarinza, Associate Professor of Department of Real Estate, NUS Business School, the low transaction volumes are consistent with an equilibrium of caution by both owners and buyers. Owners face no immediate selling pressure, while buyers are in the “wait and see” mode. They monitor the relatively high mortgage rates and are in no rush. The few investors that do find it optimal to trade have high purchasing power, and this continues to support price growth in the luxury segment over the short term.

But owners may eventually decide that the time has come to sell, and this depends on developments in the rental market. So far, cash flow constraints do not seem to be binding for current owners because high rental yields can potentially compensate for the higher mortgage payments. And even if cash becomes tight for them, the prospect of becoming tenants and paying a higher rent is not attractive, he said.

“All eyes are therefore on the dynamics of rental prices. If they remain elevated, the current equilibrium can hold steady. If they decrease, selling pressure may start to emerge,” he said.

Also today, HDB’s flash estimate of the 1st Quarter 2023 Resale Price Index (RPI) is 173.4, an increase of 0.9% over that in the 4th Quarter of 2022.

This is a slower increase than the 2.3% increase in the 4th Quarter of 2022, and is the smallest quarterly increase compared to the last 10 quarters.

The resale volume in 1st Quarter 2023 (up to 30 March) is 6,880. This is 1.0% higher than the same period last year (6,810 cases).