Research Archive - Page 3 of 3

Following April’s 57.7% month-on-month (m-o-m) fall in new sale numbers, May 2024 saw a further decline of 25.9% m-o-m to 261 units (including Executive Condominiums (ECs). This is on the back of the launches of smaller developments such as Skywaters Residences (198 units) and two boutique projects – Straits at Joo Chiat (16 units) and Jansen House (20 units).

A total of 248 new private homes were launched in May, compared to 278 units in April. This marked a 10.8% m-o-m decrease. Correspondingly, a total of 221 new homes, excluding ECs, were sold, registering a 26.6% m-o-m decrease.

EC sales momentum slowed in May 2024, with 40 units sold. With no new EC launches since January 2024, buyers are snapping up the remaining units of current EC stock. North Gaia (19 units) and Lumina Grand (20 units) accounted for 97.5% of EC units sold, with the other sold unit from Provence Residence.

EC stock fell to only 299 new EC units remaining across the five projects – North Gaia, Altura, Lumina Grand, Parc Greenwich and Tenet. Demand for ECs is likely to stay subdued until the current stock of limited options is fully sold, given the limited selection. The next ECs will likely only be launched in early-2025. as the Plantation Close and Tampines Street 62 (Parcel B) sites were awarded in September and October 2023 respectively.

Best Performing New Launches

Table 1: Top five performing new launch projects (excluding EC)

Development	Market Segment	Total units	Number of Units Sold	Median Price ($psf)
Lentor Hills Residences	OCR	598	25	$2,164
Hillhaven	OCR	341	23	$2,099
Hillock Green	OCR	474	21	$2,128
The Botany at Dairy Farm	OCR	386	18	$1,968
The Myst	OCR	408	17	$2,152

Source: URA as of 18 June 2024, ERA Research and Market Intelligence, ERApro

Excluding ECs, all five top performing developments were found in District 23 (Bukit Batok, Bukit Panjang) or District 26 (Mandai, Upper Thomson) of the Outside Central Region (OCR).

Lentor Hill Residences was the best-selling project in April, with 25 units sold at a median price of $2,164 psf. The development has now sold 88.1% of its 598 units. Following Lentor Mansion’s launch in March at benchmark prices in the Lentor Hills Estate, there was an uplift in prices for the surrounding developments that were launched previously. The median price psf for Lentor Hills Residences’ increased from $2,114 psf in March to $2,164 psf in May 2024. Similarly, Hillock Green also moved another 21 units at a median price of $2,128 psf, increasing from $2,109 psf in March.

Homes in District 23 ($2,047 psf) and 26 ($2,176 psf) presented value buys for new home buyers as their median prices are below the island-wide median of $2,206 psf (excluding ECs) in May 2024.

ECs continue to provide a strong value proposition for buyers due to the subsidies provided. However, with no new EC launches till early-2025, buyers will continue to take up existing units in the market, seen from the moving of 39 units from Lumina Grand and Altura.

Buyer Profile

Singaporeans made up the majority of new non-landed home buyers (82.5%) in May 2024, marginally lower than the 82.3% in April. Foreign buyers accounted for another six transactions (2.7%).

May 2024 also marks one year since the doubling of Additional Buyer Stamp Duty rate for non-permanent resident (PR) foreign buyers to 60%. Between June 2023 and May 2024, foreign buyers only accounted for an average of 3.1% of total new sale buyers each month. This is significantly lower than the previous 12-month period, where foreign buyers accounted for an average of 11.2% of new sale transactions each month.

Chart 1: Buyer profile for all new non-landed homes excluding ECs

Source: URA as of 18 June 2024, ERA Research and Market Intelligence

Luxury Properties (Non-landed Homes $5 mil and above)

Nine luxury new homes were sold in May 2024. Of these nine units, four were purchased by Singaporeans, four by Singapore Permanent Residents (SPRs), and one by a non-PR foreigner. The luxury home purchased by the foreigner was a 7,761 sqft unit at Skywaters Residences that transacted for $47.3 million, wherein the buyer shelled out $28.4 million for the ABSD.

These nine transactions were across six different developments in the Central Region. Seven of them were in the Core Central Region (CCR) while two are in the Rest of Central Region (RCR). The two luxury home transactions in the RCR were at The Reserve Residences, which has sold 93.7% of its 732 units since its launch in May 2023. Despite being in the city fringe, buyers are willing to pay a premium for large sized units in an integrated development which offers convenience and easy accessibility.

19 Nassim and Watten House also moved another two luxury home units each, owing to the fact that they are developments with prestigious address that are attractive to high net worth buyers.

Chart 2: Buyer profile for home $5mil and more

Source: URA as of 18 June 2024, ERA Research and Market Intelligence

New Home Sales Momentum to Remain Slow with No New Launches Slated for June

June 2024 will likely continue to see subdued sales as there are no expected launches. Moreover, the school holiday period seasonally sees more subdued sales as more people travel out of the country

New home buying activities could only start picking up in 2H 2024. Kassia (280 units) and Sora (440 units), two small-to-mid sized developments in Changi and Jurong Lake will be open for booking in July 2024. Moreover, highly-anticipated large projects such as The Chuan Park and Emerald of Katong slated for launch in 3Q 2024 are expected to capture the interest of home buyers and boost new home sales.

For now, buyers are cautious and remain sensitive to overall price quantum especially since interest rates are likely to stay elevated for longer. The initial forecast of rate cuts may be delayed further into 2024, given the persistent high inflation rate in the US. However, we could see the return of buyer interest once the rate cuts are implemented in the later part of the year.

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval.

April 2024 saw a decline in new home sales due to muted new home launches.

A total of 278 new private homes were launched in April, compared to 877 units in March. This represents a decrease of 68.3% month-on-month (m-o-m). April’s new homes sale numbers fell 58.8% m-o-m to 352 units (excluding ECs).

With no new EC launch, buyers have snapped up the remaining unsold EC stock. April saw the sale of another 51 units, and North Gaia accounted for 64.7% of the transactions. The number of unsold EC stock fell 8.1% m-o-m to 329 units.

There were three new launches in April namely, The Hill @ One North (142 units), The Hillshore (59 units) and 32 Gilstead (14 units).

32 Gilstead is a ultra luxury freehold development in the Core Central Region (CCR) moved four of its 14 units (28.6%). These transacted units are of at least 4,100 sqft and sold for upwards of $14.2 million to local buyers.

While The Hill @ One-North and The Hillshore are located in the Rest of Central Region (RCR), they are situated outside the typical heartland areas. Hence, they appeal to a distinct group of buyers, which explains for their gradual sales rate.

The Hillshore moved three of its 59 units (5.1%) at a median price of $2,599 psf.

Among the three new launches in April, The Hill @ One-North performed the best, selling 42 of its 142 units (29.6%) at a median price of $2,614 psf.

Best Performing New Launches

Table 1: Top five performing new launch projects

Development name	Market segment	Total units	Number of Units Sold	Median Price PSF ($)
The Botany at Dairy Farm	OCR	386	50	$2,003
The Hill @ One-North	RCR	142	42	$2,614
North Gaia (EC)	OCR	616	33	$1,315
Hillhaven	OCR	341	22	$2,080
Pinetree Hill	RCR	520	18	$2,439
Lumina Grand (EC)	OCR	512	18	$1,515

Source: URA as of 15 May 2024

Four of the top five performing developments were found in the Outside Central Region (OCR).

The Botany at Dairy Farm was the best-selling project in April, with 50 units sold at a median price of $2,004 psf. With new OCR projects transacting at a median of $2,204 psf as at April, The Botany at Dairy Farm is a value buy for new home buyers.

North Gaia was the best-selling EC project in April, moving another 33 units at a median price of $1,315 PSF. Lumina Grand also moved another 18 units at a median price of $1,515 psf.

Buyer Profile

Singaporeans made up the majority of new home buyers (82.9%) in April 2024, a decline from 91.6% in March. Foreign buyers accounted for another 10 transactions (3.4%).

Chart 1: Buyer profile for all new non-landed homes excluding ECs

Source: URA as of 15 May 2024, ERA Research and Market Intelligence

Luxury Properties (Non-landed Homes $5 mil and above)

Chart 2: Buyer profile for homes transacted at $5mil and more

Source: URA as of 15 May 2024, ERA Research and Market Intelligence

Twelve luxury new homes were sold in April 2024. Of these twelve units, five were purchased by Singaporeans, six by Singapore Permanent Residents (SPRs), and one by a foreigner. The luxury home purchased by a foreigner was a 1,851 sqft unit at Watten House was transacted for $6.2 million.

Five of these 12 luxury homes were at Watten House, which has sold 78.9% of its 180 units since November 2023. Another four units were sold at 32 Gilstead, targeting high-net-worth buyers with prices starting at $13 million.

The highest-transacted property was a 4,209 sqft unit at 32 Gilstead, purchased by a local buyer for $14.5 million ($3,455 PSF).

Singapore residents accounted for 91.7% of new home luxury market sales in April, as the punitive ABSD rates continue to deter foreign buyers.

New home sales momentum to remain slow in May with only one boutique development being launched

May will only see the launch of Straits at Joo Chiat, a boutique development comprising 16 units.

New home buying activities could only pick up after July as we expect fewer launches in May and June.

In 2H 2024, highly anticipated projects such as The Chuan Park (916 units) and Emerald of Katong (846 units) are expected to capture home buyers’ interest and boost new home sales.

Amid the economic headwinds, geopolitical instability, rising retrenchment exercises and higher-for-longer interest rates, buyer sentiment remained lukewarm. Furthermore, there have been emerging concerns around the persistently high inflation rate in US which could impact the Federal Reserve’s decision to cut interest rates this year. As a result, some prospective homebuyers may hold back on home purchases till second half of the year.

Barring any unforeseen circumstances, ERA forecasts new home sale to ranging between 7,000 and 8,000 units in 2024.

Disclaimer

HDB has launched the Resale Flat Listing (RFL) service to create a transparent, reliable and trusted marketplace for the listing and transactions of HDB resale flats. Flat owners or their property agents can list flats for sale and complete their resale transactions on the HDB Flat Portal.

The RFL service will soft launch on 13 May 2024 while the official launch is set to be on a later date within the same month. The RFL service is the latest enhancement to the HDB Flat Portal and will be free of charge for the time being.

Why has HDB launched the Resale Flat Listing Service?

1. Improve convenience for buyers and sellers of HDB flats

Since 2018, HDB has launched the HDB Resale Portal to streamline and simplify the resale transaction process. Subsequently, the HDB Flat Portal was launched to complement the HDB Resale Portal for home buyers and sellers to gather information on the purchase (new or resale) or sale of a flat, on a single integrated platform. Some of the enhancements include one-stop loan listing service, customisable financial calculators, as well as information on the HDB Flat Eligibility (HFE) letter.

The RFL service is the part of HDB digitalisation efforts aligned with the government’s Real Estate Industry Transformation Map strategies. The aim of the industry transformation map is to use technology to deliver seamless and efficient property transaction services.

2. RFL to help verify HDB buyers and sellers

The RFL will help weed out fake HDB listings, which is pervasive on listing portals, through verification of resale listings.

For flats sellers with a valid Intent to Sell, they can either choose to appoint a property agent to manage their flat listing on the HDB flat portal, or list and market their flat on their own. But each seller can only post one flat listing to ensure that there is no duplicative listing for the same flat.

Even though any prospective flat buyer can browse the flat listings on the RFL service, only those with a valid HFE letter can obtain the sellers’ contact details, allowing them to schedule viewing appointments through the HDB Flat Portal.

3. RFL to help manage sellers’ price expectations which will ensure a more sustainable property market in the long run

The system will prompt the seller if the listed price is 10% higher than the last transacted price in the vicinity over the past six months. This feature helps sellers stay informed about recent resale prices and allows them adjust their listing price to better reflect market conditions.

Are real estate agents still relevant with the launch of the Resale Flat Listing?

The biggest question on everyone’s mind would be, “will real estate agents and listing portals become a thing of the past for the HDB resale market?”

1. A real estate agent can help navigate the complex HDB sales process

For many consumers, transacting an HDB flat might only happen once or twice in their lifetime. With the constantly evolving HDB resale rules and paperwork, the resale process can seem daunting for many consumers.

By engaging a real estate agent, sellers and buyers can receive guidance on the up-to-date processes and advice how they can approach the sales process efficiently.

2. Real estate agents to negotiate in your interest, and help brokerage the best deal

Some real estate agents specialise in certain housing estates, which enables them to develop strong market insights and intelligence. In this way, they can help sellers conduct thorough competitive market analysis, and have proven to bring sellers the best possible price achievable for their units.

Beyond just negotiating prices, real estate agents serve as intermediaries between buyers and sellers, helping them to align on intangible aspects such as the submission dates and HDB appointment dates.

To illustrate, a seller must ensure the delivery of his HDB unit after they have moved into their next home. This will require extensive coordination, from managing the flow of funds from the sale to the purchase, to timing the move and settling into the new place before the handover of the existing flat.

3. Business as usual for listing portals even though they are expected to a decline in HDB listings

For the time being, the RFL service will be free of charge allowing HDB sellers with their exclusive property agents to save on advertisement cost.

Furthermore, since the RFL will allow only allow sellers with a valid Intent to Sell to post their listings, this will help weed out fake HDB listings, which is pervasive on listing portals.

With the RFL, we anticipate HDB sellers will be less reliant on existing listing portals, and that could lead to a decline in HDB listing on such portals.

We believe the RFL will benefit real estate agents who focus on exclusive listings and here’s why:

4. Savings on advertisement cost for HDB real estate agents

Once appointed by the HDB sellers, the HDB real estate agent can leverage on the RFL to advertise the listing. For now, the RFL is free of charge and this can translate to savings on advertisement cost.

5. Pre-qualified buyers for the listings

The RFL allows any prospective flat buyer to browse the flat listings but those with a valid HFE letter can obtain the sellers’ contact details, allowing them to schedule viewing appointments through the HDB Flat Portal.

This ensures that the prospective buyers are pre-qualified before the viewing, which may not be the case for now. Currently, some buyers may not have completed the necessary loan assessment before viewing the flats, and this impedes their ability to make an offer.

Separately, some buyers may be looking to take a bank loan for their upcoming HDB purchase, and for now the RFL does not cater to this group of buyers.

6. RFL will help to manage sellers’ price expectations

7. Providing a more accurate reflection on the available listings in the market

For real estate agents serving buyers, having an accurate overview of the available listings in the market helps them facilitate appointments more efficiently. They no longer need to sift through fake listings on listing portals, enabling them to better inform their buyers about market conditions and advise on realistic buying prices.

In a nutshell, the RFL is poised to offer greater transparency to the HDB market, fostering more sustainable price growth over time term. However, it faces some initial challenges such as facilitating contact between buyers using bank loans and sellers to arrange viewings. Sellers must also be ready to be overwhelmed by non-serious enquires from buyers and real estate agents. Overall, we view the RFL as a significant step towards improving transparency and efficiencies of the real estate market. Real estate agents should work alongside with the RFL to enhance their professionalism and service to their clients.

Disclaimer

Ask any Singaporean what they think of Sentosa Cove and you may hear responses like “posh,” “rich,” or “symbol of status”. Sentosa Cove is all about swanky cars and over-the-top architecture, representing the upmarket community it embodies.

When the Sentosa Cove Masterplan was first conceptualised in 1992, Sentosa Cove was envisioned to be Singapore’s exclusive waterfront resort living, mimicking Port Grimaud in France. The idea was to offer another housing option for wealthy individuals and families seeking respite from the urban hustle and bustle, yearning for the resort lifestyle seen in places like Dubai’s Palm Jumeirah or Florida’s Palm Beach.

Because of this, foreign buyers, who are non-permanent residents, may apply to acquire a piece of landed property at Sentosa Cove, and approvals are generally granted.

Two decades after its first land parcel was sold, Sentosa Cove has seen moderate success but has fallen short of lofty expectations. Home prices in Sentosa Cove continue to languish and have failed to keep pace with Core Central Region (CCR) home price growth. In this piece, we will review Sentosa Cove and unpack its relevance in the Singapore housing market today.

The birth of Sentosa Cove – there are only so many homes here

With the sale of its first land parcel in 2003, Sentosa Cove heralded a new era of luxury waterfront living in Singapore. By 2006, the first development on Sentosa Cove was completed, and by 2008, all land parcels had been sold. Sentosa Cove was paving its way towards becoming a prestigious waterfront community, enticing individuals with deep pockets from around the world to invest in Singapore.

Zoned within the CCR, Sentosa Cove boasts of some 2,160 residential homes; approximately 16% are landed homes. This makes up about 0.5% of islandwide private home stock. Despite all homes at Sentosa Cove being on 99-year leases, the allure of spacious waterfront lifestyles and coveted addresses are compelling reasons for one to aspire to own a piece of Sentosa Cove. According to Squarefoot research, Singaporeans account for close to 50% of the buyers of new homes at Sentosa Cove, with Singapore Permanent Residents and Foreigners accounting for 21% and 23% respectively.

However, apart from non-landed properties, there are some restrictions around buying Sentosa Cove landed properties. For instance, foreigners are only allowed to purchase one detached house for their own use. In the past, the Long-Term Visit Pass scheme granted foreign buyers in Sentosa Cove long-term stays within Singapore, but the scheme was terminated in 2014. In contrast, Singaporeans face no restrictions on the number of detached houses they can buy, and there are also no limitations when leasing these units.

Two decades on, Sentosa Cove has blossomed into a self-sufficient upscale neighbourhood

Today, Sentosa Cove has evolved into a luxurious neighbourhood where living next door to influential and affluent personalities is the norm. It’s a melting pot of local homeowners and expatriate tenants, adding to its cosmopolitan allure.

Beyond its curated selection of restaurants along Quayside Isle and nearby hotels, Sentosa Cove boasts amenities like supermarkets and several preschools, catering to the diverse needs of its residents.

The nearby ONE°15 Marina Sentosa Cove yacht club and the renowned Sentosa South Golf Island offer not just leisure and recreational opportunities but also serve as hubs for socialising among the well-heeled.

Homes in Sentosa Cove are highly coveted for the status symbol and lifestyle they represent. Landed homes, in particular, can be customized to owners’ preferences, with some known for their quirky architecture.

Moreover, the luxury of space allows for ample room to host functions and dinners, enabling residents to showcase their homes to relatives, friends, and, importantly, business partners.

How have home prices at Sentosa Cove fared so far?

We’ve segmented our analysis into three distinct time periods to explore the evolving dynamics and challenges of Sentosa Cove. Each period reflects unique market conditions shaped by factors such as government policies, economic trends, and external events. Given Sentosa Cove’s prestigious status, we’ll be juxtaposing its home prices with those in the CCR.

Conception of Sentosa Cove (2004 – 2010)

With successive new home launches in the area, Sentosa Cove experienced robust home sales and significant price growth. Transaction volume steadily rose, reaching a peak in 2006 with 522 transactions. During this period, both non-landed and landed property prices in Sentosa Cove saw substantial appreciation. Non-landed properties surged from $829 per square foot (psf) in 2004 to $2,325 psf in 2010, while landed properties followed a similar trajectory, climbing from $765 psf to $1,933 psf.

Pre COVID-19 (2011 – 2019)

Between 2011 and 2020, multiple rounds of cooling measures effectively dampened foreign buyer interest in Sentosa Cove. Additionally, global economic headwinds exacerbated the decline in foreign buyer demand, leading to a notable decrease in both home prices and transaction volume in Sentosa Cove. By 2015, the average non-landed home prices had plummeted by 34.4% from their peak in 2010, while landed homes experienced a more gradual price decline.

After 2017, home prices in Sentosa Cove began to gradually decline, in stark contrast to the continued increase in prices observed in the CCR.

COVID-19 and Post-COVID-19 (2020 – 2023)

From 2020 to 2023, a post-COVID housing demand boom characterized the market, fueled by pent-up demand and renewed interest from buyers in Sentosa Cove. During this period, prices for non-landed properties in Sentosa Cove increased by 16.2%, while landed properties saw a growth of 6.8%. Transaction volume in 2021 reached a 10-year peak, reflecting heightened market activity in Sentosa Cove. However, the market’s momentum slowed thereafter due to the April 2023 Additional Buyer Stamp Duty (ABSD) hike, imposing a hefty 60% tax on foreign buyers purchasing residential properties.

Additionally, the slew of money laundering cases in headlines during 2023 led to increased caution among buyers, prompted by more stringent checks and unwanted scrutiny. Despite the recovery in home prices at Sentosa, the home prices remained comparatively lower than homes in the CCR.

Chart 1: Homes at Sentosa Cove

Source: URA as at Feb 2024, ERA Research and Market Intelligence

Around 41% of Sentosa Cove transactions were profitable in the last ten years

In the last ten years, about 40% of transactions in Sentosa Cove were profitable. However, it’s noteworthy that landed homes outperformed non-landed ones in terms of profitability. Specifically, 54% of landed home transactions in Sentosa Cove reported an average median gross profit of $3.6 million. In contrast, during the same period, only 38% of non-landed home transactions in Sentosa Cove resulted in a profit, with an average median gross profit of $587,000.

Chart 2: Transactions in Sentosa Cove (2013-2023)

Source: URA as at Feb 2024, ERA Research and Market Intelligence

Sentosa’s rental market

Between 2015 and 2023, Sentosa Cove saw an average of 764 non-landed units and 57 landed homes being rented out yearly. This accounted for almost 38% of the total homes at Sentosa Cove. Non-landed rents at Sentosa Cove are comparable to those in the Core Central Region (CCR), while landed rents at Sentosa have been rising and are now at their all-time peak. High-net-worth tenants looking for waterfront homes are willing to pay higher rents for these rare units.

Chart 3: Median Rents and Rental Contracts in Sentosa Cove

Source: URA as at Feb 2024, ERA Research and Market Intelligence

Sentosa Cove – the comeback kid

Sentosa Cove to benefit from the Sentosa-Brani Masterplan development

Announced in 2019, the Sentosa-Brani Masterplan had a vision to transform the island into a game-changing leisure and tourism destination. There will be five zones across the island that will see new indoor and outdoor attractions for families, nature lovers, and adventure seekers. In addition, the opening of the 30,000 square meter (sqm) multisensory two-tiered walkway will integrate and connect Resorts World Sentosa in the north with Sentosa’s beaches in the south. Redevelopment works at Sentosa are part of the plans for the Greater Southern Waterfront, which includes Keppel, Sentosa, and Gardens by the Bay.

Since there are no plans to increase the number of residential units in Sentosa, the redevelopment is expected to yield positive effects on Sentosa Cove, as it will be minutes away from aspiring world-famous attractions.

Future of work

In a post-pandemic world where hybrid or remote work is becoming more prevalent, Sentosa Cove emerged as choice place of residence. It’s serene and idyllic environment, along with its luxurious amenities, make it attractive for those pursuing sophistication, leisure and a refined lifestyle even as they are working from home. Even though Sentosa Cove is pretty self-sufficient, enhanced last mile delivery options have further elevated convenience for residents in recent years.

Singapore’s reputation as a safe haven beckons High Net Worth Individuals (HNWIs)

Singapore’s reputation for safety, political stability, and economic resilience continues to attract foreign investors. The government has been relentlessly pursuing High Net Worth Individuals (HNWIs) and talents to Singapore through various schemes, enticing them to invest here, including in residential properties.

The Global Investor Programme allows HNWIs who generate economic spin-offs and create employment to attain Permanent Residency status. To do so, they can choose to invest at least S$10 million in a business or S$25 million in an approved fund.

Other long-term programmes for high-income skilled foreign talents include the Overseas Networks & Expertise Pass and the Tech.Pass.

Being recognised as a wealth hub in Asia, Singapore attracted some $2,619 billion in foreign direct investment and has close to 1,100 family offices established in Singapore as at 2022. Moreover, the KPMG Private Enterprise and family office consultancy Agreus estimated as at 2023, 59% of all family offices in Asia are located in Singapore.

But the government could potentially sweeten the deal for foreigners through Sentosa Cove.

Is it time to reduce ABSD for foreign buyers purchasing properties Sentosa Cove?

The initial vision for Sentosa Cove was conceived with the aim of positioning Singapore as a premier waterfront living destination for the affluent.

However, along the way, multiple rounds of cooling measures have taken a toll on the Sentosa Cove housing market. Sentosa home price growth has not kept pace with homes on the main island. In 2023, the CCR average home prices reached around $2,510 psf compared to the average of $1,992 psf at Sentosa Cove.

One potential solution is to reduce the ABSD payable by foreign buyers purchasing homes at Sentosa Cove from 60% to 20%. This would align with what a Singaporean would pay when buying a second property. By implementing this change, this may redirect more foreign buyer interest towards Sentosa Cove.

Sentosa Cove is on track to becoming a choice waterfront living enclave in the region

Singapore will continue to be a magnet for global investors due to its reputation for safety, political stability, and ease of doing business. This, in turn, will help support the Singapore property market over the long term.

Sentosa Cove offers a differentiated product and presents an opportunity for those aspiring to immerse themselves in the epitome of luxury waterfront living. One can revel in its unparalleled luxury and exclusivity by indulging in oceanfront villas, tranquil waterway bungalows, and an array of upscale condominiums at Sentosa Cove.

Beyond its stunning architecture and picturesque landscapes, Sentosa Cove is still priced below homes in the CCR, and that presents a value buy for investors. Going forward, with the anticipated rising home prices across the island, coupled with redevelopment in Sentosa and the Greater Southern Waterfront, home prices in Sentosa Cove could see further appreciation in the future.

Have we piqued your interest in Sentosa Cove? Here are some exciting home options.

Cape Royale

DESCRIPTION

Cape Royale Sentosa Cove is the tallest residential condo. Situated just at the entrance of the marina leading into Sentosa Cove Singapore. Sentosa Cove condo residents will be enjoying the breathtaking views of the South China Sea and Tanjong Golf Course.

Cape Royale condo is developed by Pinnacle (Sentosa) Pte Ltd. This iconic tower will offer 302 luxurious residential units in Sentosa Cove. Residents will have easy access to an integrated marina, One°15 Marina Club and Resort World Sentosa. All other Sentosa Island entertainments are with minutes reach. On top of the Sentosa Island attractions, Cape Royale Singapore is easily accessible to and from the main island of Singapore. Travel time to Singapore Changi International Airport is within half an hour drive away.

The Residences At W Singapore Sentosa Cove

The Residences is a luxury leasehold condominium project comprising 228 exclusive apartment suites situated amongst a wave of six-storey condominium blocks.

Disclaimer

Budget 2024 announced four changes that will affect home owners and the Singapore residential market. Here is what you need to know.

1. Enhanced Annual Value Band for Owner-Occupier Residential Properties to offer Property Tax Relief in 2025

Owner-occupier residential property will pay lower property tax from 2025 with as Annual Value (AV) bands adjust higher. The earlier tax had meant to be a wealth tax. But with the AV rising due to higher rents, the majority of owner-occupier residential properties were impacted by a significant jump in their property tax. This move will be a relief for the majority of homeowners.

Table 1: Changes To Property Tax

Marginal PT rate	Portion of AV (S$)	Portion of AV (S$)
Marginal PT rate	2024	From 1 Jan 2025
0%	$0 – $8,000	$0 – $12,000
4%	>$8,000 – $30,000	>$12,000 – $40,000
6%	>$30,000 – $40,000	>$40,000 – $50,000
10%	>$40,000 – $55,000	>$50,000 – $75,000
14%	>$55,000 – $70,000	>$75,000 – $85,000
20%	>$70,000 – $85,000	>$85,000 – $100,000
26%	>$85,000 – $100,000	>$100,000 – $140,000
32%	>$100,000	>$140,000

Source: MOF, ERA Research and Market Intelligence

For example, an OCR 3 bedroom with an AV of $40,000 can enjoy a tax saving of $360 in 2025. While a semi-detach with an AV of $85,000 can enjoy a tax savings of $2,460.

Table 2: Property tax relief for owner-occupier residential properties from 2025

Annual Value	Property Tax		Property tax decrease
	2024	2025	Property tax decrease
$12,000	$160	$0	$160
$20,000	$480	$320	$160
$30,000	$880	$720	$160
$40,000	$1,480	$1,120	$360
$55,000	$2,980	$2,220	$760
$70,000	$5,080	$3,720	$1,360
$85,000	$8,080	$5,620	$2,460
$100,000	$11,980	$8,620	$3,360
$140,000	$24,780	$19,020	$5,760

Source: ERA Research and Market Intelligence

In addition, retirees living in properties with high AV but face cash flow issues paying their property taxes can opt for a 24-month instalment plan with no interest over the regular 12-month. This will make monthly payments more affordable for them. They must be aged 65 and above, living in the property they own and have an assessable income of $34,000 or less.

2. Single Seniors concession on ABSD

Single Senior Singapore citizens aged 55 and above to get the additional buyer’s stamp duty (ABSD) refund to help them in “right sizing” their property. To qualify, these buyers will need to sell their only residential property within six months of purchasing a replacement lower-value private property.

The ABSD concession extended to single senior Singaporeans is timely, providing this group of Singaporeans another option to right size their properties, helping them to unlock some monies from their existing property that could support their retirement. The punitive 20% ABSD have previously deterred this group to look into the private property segment, restricting them to only HDB resale flats; but they will now have another housing alternative.

However, for those who are unable to foot the 20% ABSD first will still have to sell their existing property before buying. For a $1.2 million property, the ABSD is $240,000 and this is payable within 14 days of exercising the Option to Purchase the private property.

3. Lower ABSD clawback rate for developers of housing developments that sell >90% within 5 years

Housing developers will have more flexibility with the ABSD clawback if they sell at least 90% of their units. Developers will pay the full 25% or 35% (depending on when the site is purchased) as long as there are unsold units. ABSD remission clawback is subject to 5% interest per annum.

From 16 February 2024 onwards, the clawback rate will be reduced if they sell at least 90% of units in the development within the five-year timeline. This provides them with more flexibility, while ensuring that supply of new homes are released in a timely manner.

The recent GLS biddings drew more muted responses as developers are cautious amid the elevated interest rate environment and slower new home sales rates. By lowering the ABSD clawback based on the proportion of units sold, this will give developers some respite and confidence to bid for upcoming GLS sites, allowing them more time to sell their balance units. Some of the larger units due to their higher price quantum typically take longer to sell.

To put things into perspective, the 1% unsold units equates to 7 units in a 700-unit housing development. Under this revised ABSD remission clawback, a $1 billion site which have 1% unsold units can save up to $100 mil, which is pretty substantial.

Table 3: Revised ABSD remission clawback for residential projects

Proportion of units sold	Projects with residential land acquired between 6 Jul 2018 and 15 Dec 2021, subject to 30% ABSD with upfront 25% remission		Projects with residential land acquired on or after 16 Dec 2021, subject to 40% ABSD with upfront 35% remission
	ABSD Remission clawback applicable before 16 Feb 2023 (%)	ABSD Remission clawback applicable after 16 Feb 2023 (%)	ABSD Remission clawback applicable before 16 Feb 2023 (%)	ABSD Remission clawback applicable after 16 Feb 2023 (%)
100%	0%	0%	0%	0%
99%	25%	15%	35%	25%
98%	25%	16%	35%	26%
97%	25%	17%	35%	27%
96%	25%	18%	35%	28%
95%	25%	19%	35%	29%
94%	25%	20%	35%	30%
93%	25%	21%	35%	31%
92%	25%	22%	35%	32%
91%	25%	23%	35%	33%
90%	25%	24%	35%	34%
<90%	25%	25%	35%	35%

Source: MOF, MND, ERA Research and Market Intelligence

Table 3: ABSD clawback for a $1 billion site purchased in January 2024

	Before 16 Feb 2024		After 16 Feb 2024
Proportion of units sold (%)	ABSD remission clawback rate	ABSD clawback amount	ABSD remission clawback rate	ABSD clawback amount
88%	35%	$ 350 mil	35%	$350 mil
90%			34%	$340 mil
95%			29%	$290 mil
99%			25%	$250 mil

Source: ERA Research and Market Intelligence

4. Eligible families waiting for BTO can soon get voucher to rent flat in open market.

To help young couples who are ready to settle down, the Government will provide a voucher under the Parenthood Provisional Housing Scheme (PPHS) so that eligible families waiting for their Build-To-Order (BTO) units can rent a Housing Board flat on the open market. The voucher will be available for a year.

The PPHS provides interim rental housing to families with a monthly household income of $7,000 or below, and have an uncompleted flat from HDB’s sales exercises.

There are no details yet on the amount of the voucher and the mechanics of the scheme.

In summary

Overall, the budget changes are relatively minor and focus on fine-tuning existing policies rather than introducing any major overhauls. We believe, these adjustments are designed to enhance the effectiveness of current measures and address emerging issues.

Disclaimer

The rental market showed signs of stabilising since 2Q 2023 with the slower growth of the rental index. Meanwhile the HDB rental market stayed resilient. Has the rental market tipped in favour of tenants?

Private Residential Rental

The all private residential property rental index prices grew 11.1% in the first nine months of 2023. Rental growth has been more gradual since 2Q 2023, with the rental index rising by 2.8% quarter-on-quarter (q-o-q) in 2Q 2023 and 0.8% q-o-q in 3Q 2023. The rental index surged 53.0% between 3Q 2020 and 1Q 2023 on the back of COVID-led disruptions, but the rate of growth has ease since the second half of 2023.

Chart 1: Rental Index of Private Residential Properties

Source: URA as at 20 Dec, ERA Research and Market Intelligence

Looking at non-landed median prices across the regions, all regions have seen rents easing since the beginning of 2023. But the Core Central Region reportedly saw median rents moderated in 3Q 2023. In light of the softer economic outlook, more tenants have observed to be prudent with their rental budgets choosing to downsize their apartments, or move further outskirt to capitalise on more affordable rents. This has supported rents in the Rest of Central Region and the Outside Central Region.

Chart 2: Non-landed median rent by market segment

Source: URA, ERA Research and Market Intelligence

The number of private residential rental contracts for 11m 2023 reached 76,686 contracts, contracting by 10.3% compared to 84,551 contracts inked in 11m 2022. This is largely attributed to the moderation of rental demand with the progressive easing of the construction backlog. For the whole of 2023, the private residential contracts could reach between 80,000 and 82,000.

Chart 3: Private residential rental contracts

Source: URA as at 20 Dec, ERA Research and Market Intelligence

More rental inventory expected with the slew of new home completions

Some 19,000 private residential units (excluding EC) completed in 2023, marking the highest annual supply completion since 2016. Another 10,000 units are schedule for completion in 2024. More rental inventory will come onstream with the slew of new home completions.

Chart 4: Private residential completions

Source: URA, ERA Research and Market Intelligence

Landlords to bear the brunt of higher property tax going forward

Annual values and property taxes are set to rise in 2024, and landlords will find themselves bearing the brunt of the increase amid a softer rental market. To put things into perspective, a property with a $45k annual value will see its property tax increase by 15.8% from $5,700 to $6,600. A property with a $60k annual value will see its property tax increase by 22.0% from $8,850 to $10,800.

Table 1: Non-owner-occupier residential tax rates (residential properties)

Annual Value($)	Effective 1 Jan 2023	Property Tax 2023	Effective 1 Jan 2024	Property Tax 2024	Property Tax Increase	Percentage Increase
First 30,000	11%	$3,300	12%	$3,600	$300	9.1%
Next $15,000	16%	$2,400	20%	$3,000	$600	25.0%
First $45,000	–	$5,700	–	$6,600	$900	15.8%
Next $15,000	21%	$3,150	28%	$4,200	$1,050	33.3%
First $60,000	–	$8,850	–	$10,800	$1,950	22.0%
Above $60,000	27%		36%

Source: IRAS, ERA Research and Market Intelligence

Rental demand has gradually receded since the beginning of 2023 with the clearing of the construction backlog. The influx of new home completions since 2Q 2023 has helped ease the rental market with more inventory coming onstream. ERA anticipates private residential rental prices to ease as much as 5% and the number of rental contracts to reach between 75,000 – 80,000 in 2024.

HDB Rental Market expected to stay resilient in 2024

HDB median rental prices reported sustained growth over the first nine months of 2023. On average, the HDB median rental price for 3-room flat and 4-room flat across the various town rose 11.2% and 11.4% respectively in the first nine months of 2023. Meanwhile, 5-room and Executive flats reported steeper growth of 13.7% and 21.5% across various towns over the same period.

Table 2: 3Q 2023 HDB median rents by town and y-o-y growth

3Q 2023					Y-o-y
Town	3-Room	4-Room	5-Room	Executive	Town	3-Room	4-Room	5-Room	Executive
Ang Mo Kio	$2,700	$3,380	$3,700	*	Ang Mo Kio	17.4%	16.6%	17.5%
Bedok	$2,700	$3,280	$3,500	$4,000	Bedok	17.4%	17.1%	16.7%
Bishan	$2,800	$3,600	$4,000	*	Bishan	7.7%	12.5%	12.7%
Bukit Batok	$2,600	$3,150	$3,700	*	Bukit Batok	18.2%	18.9%	15.6%
Bukit Merah	$3,000	$3,900	$4,400	–	Bukit Merah	15.4%	11.4%	15.8%
Bukit Panjang	$2,600	$3,000	$3,400	$3,450	Bukit Panjang	-3.7%	5.3%	13.3%
Bukit Timah	*	*	*	*	Bukit Timah
Central	$3,080	$4,100	*	–	Central	10.0%	6.5%
Choa Chu Kang	$2,300	$3,100	$3,300	$3,300	Choa Chu Kang	-17.9%	10.7%	10.0%	10.0%
Clementi	$2,900	$3,800	$4,000	*	Clementi	16.0%	18.8%	17.6%
Geylang	$2,700	$3,100	$3,850	*	Geylang	14.9%	3.3%
Hougang	$2,580	$3,150	$3,450	$3,000	Hougang	12.2%	14.5%	27.8%	11.1%
Jurong East	$2,680	$3,500	$3,700	*	Jurong East	7.2%	20.7%	19.4%
Jurong West	$2,700	$3,200	$3,500	$3,600	Jurong West	22.7%	10.3%	15.5%	38.5%
Kallang/ Whampoa	$2,700	$3,500	$3,400	*	Kallang/ Whampoa	10.2%	12.9%	-8.1%
Marine Parade	$3,000	$3,080	*	–	Marine Parade	25.0%	-8.1%
Pasir Ris	*	$3,300	$3,300	$3,800	Pasir Ris		22.2%	10.0%	26.7%
Punggol	$2,800	$3,300	$3,400	*	Punggol	-1.8%	10.0%	9.7%
Queenstown	$3,000	$4,300	$4,500	–	Queenstown	9.9%	19.4%	7.1%
Sembawang	*	$3,200	$3,200	$3,500	Sembawang		6.7%	11.5%	11.1%
Sengkang	$2,900	$3,200	$3,400	$3,450	Sengkang	13.7%	6.7%	9.7%	23.2%
Serangoon	$2,700	$3,400	$3,550	*	Serangoon	8.0%	6.3%	26.8%
Tampines	$2,880	$3,300	$3,580	$3,700	Tampines	15.2%	17.9%	11.9%	26.3%
Toa Payoh	$2,800	$3,500	$4,000	*	Toa Payoh	16.7%	1.4%	25.0%
Woodlands	$2,500	$3,000	$3,230	$3,500	Woodlands	13.6%	13.2%	4.2%	25.0%
Yishun	$2,650	$3,100	$3,500	*	Yishun	10.4%	10.7%	11.1%
Average	$2,751	$3,378	$3,633	$3,530	Average	11.2%	11.4%	13.7%	21.5%

Source: HDB, ERA Research and Market intelligence

HDB rental approvals have been fairly stable, reaching 29,351 units in the first nine month of 2023. Factoring in fewer transactions due largely to the holiday season in the final quarter, ERA projects HDB rental contracts could reach around 80,000 by end-2023.

Chart 5: Number of rental approvals for HDBs

Source: HDB as at 20 Dec, ERA Research and Market Intelligence

Cap in HDB rental supply going forward with fewer MOP units

The lower number of units reaching their Minimum Occupancy Period (MOP) could put a cap on HDB rental supply in the medium term. In addition, some of the recent Build-to-Order homes are subjected to the longer MOP period and have stricter restrictions around rental.

MOP flats

Chart 6: No. of HDB flats (3-room and larger) achieving MOP status by year

Source: data.gov.sg, ERA Research and Market Intelligence

The HDB market can expect to see higher rental growth driven by a shortage of rental inventory.

HDB rental market will stay resilient, with average rental prices expected to grow by up to 10% in 2024. ERA forecasts the number of rental approvals to range between 37,000 and 38,000 in 2023, and stay similar between 36,000 to 38,000 contracts in 2024.

Temporary relaxation of occupancy cap for rental of HDB flats and private residential properties

The Housing & Development Board (HDB) and the Urban Redevelopment Authority (URA) jointly announced on 20 December 2023 that they will be relaxing the occupancy cap for larger HDB flats and private residential properties from 22 January 2024 to 31 December 2026.

During this period, larger accommodations, defined as units that are 90 square meter and above for private residential properties or 4-room or larger HDB flats and equivalent HDB commercial properties, will be allowed to house up to eight unrelated persons (i.e. not from the same family unit), up from the current cap of six unrelated persons. The higher allowance in occupancy cap aims to better meet rental demand and support households that intend to rent. The application submitted to request for additional tenants will be subject to HDB or URA approval before the tenancy commencement date.

The temporary increase in occupancy cap would also mean more rental supply available for those with immediate rental needs.

Implications on the rental market for various stakeholders

Landlords of larger units can increase their rental income as long as they can maximize their tenant occupancy. This will provide them with some respite from softer rental market and the increased property tax in 2024.

Tenants can share the rent among a larger group of tenants, potentially reducing rental costs. For instance, multi-generation families may now be able to live together in a rental unit following the upsize in occupancy cap.

Foreign workers on S Pass / Work permit and foreign students are likely to maximise their occupancy, particularly for HDB rental units, to keep their rents lower.

Companies that employ a higher number of foreign workers, such as those from the food and beverage and service sectors, will benefit as they will require fewer rental units to house their staff.

Rental market turns in favour of tenants in 2024

With more new home completion in the coming months and the relaxation of the occupancy cap for larger residential units, more rental supply is expected to come onstream and help alleviate the rental supply crunch. Correspondingly, rental demand has gradually receded since the beginning of 2023 with the clearing of the construction backlog. It appears that the rental market is shifting to become more favourable for tenants. Tenants are likely to enjoy greater negotiating power enabling them to secure more favourable lease terms. The rapid run up in rents in 2021 and 2022 have driven tenants to move further outskirt of the city to take advantage of the lower prices.

newly completed condo

More landlords will need to shoulder the burden of increased mortgage payments, higher property taxes while being constrained by the limited rental upside stemming from increased competition for tenants. This could mean stickier rents in the 1Q 2024 as some landlords who have strong holding power could hesitate to compromise on rents despite a softer market.

ERA forecasts private residential rental price can ease as much as 5% with the more inventory coming onstream in 2024, and the number of rental contracts could range between 75,000 – 80,000 in 2024.

On the contrary, the HDB market can expect to see higher rental growth driven by a shortage of rental inventory. HDB rental market will stay fairly resilient, with average rental prices to grow by up to 10% in 2024. ERA forecasts the number of rental approvals to range between 37,000 and 38,000 in 2023, and stay similar between 36,000 to 38,000 contracts in 2024.

Disclaimer

The market share of new private home buyers, aged 26 to 35 years old, more than tripled between 2015 to 2022.

Even in the face of recent headwinds, including higher interest rates, moderating economic activity, and the implementation of market cooling measures in April 2023, the demand for new private homes among Singaporeans has stayed steadfastly strong.

Singaporeans have consistently held sway in Singapore’s new private home market, capturing the lion’s share of yearly new home purchases. In 2015, Singaporeans accounted for approximately 75.8% of new private home sales; this percentage has risen steadily across the years, reaching a peak of 84.5% in 2020 and has remained at similar levels since.

Chart 1: New Private Home Buyers by Nationality and Residential Status (2015 to 2023)

Source: URA as of 18 Jan 2024, ERA Research and Market Intelligence

This upswing in Singapore buyers follows a steady growth in demand for new private residential homes, particularly amongst young Singaporeans, whom we define as Singaporeans aged between 26 to 35 years old.

Between 2015 to 2022, the cohort of local adults comprising the aforementioned age group of new private home buyers has more than tripled – a finding that tallies with mainstream media observations about the homeownership aspirations of Singaporean millennials and Gen-Zers.

The changing face of Singaporean new private home buyers

Based on proprietary industry data from ERA Singapore, covering a sample size of 37,000 Singaporean new home buyers, we have identified three prominent demographic trends pertaining to new private home buyers in Singapore.

1. A rising proportion of young Singaporeans are buying new private homes

Mirroring housing markets worldwide, older Singaporeans have traditionally dominated the domestic market for new private homes, but there are now compelling signs supporting a noticeable shift in this widely-held narrative.

Across the past nine years, the share of young Singaporean buyers of new private homes has climbed steadily. In 2015, this demographic group accounted for just 9% of new private home sales in the country; this figure has since surged by 26 percentage points to 35% in 2023.

The proportion of Singaporeans under 25 in the new private home sales market, though still small, also grew to 3% in 2023.

After the COVID-led demand surge seen in 2021, we saw the Singapore residential market transiting into a different realm largely characterised by rising home prices amid supply chain disruption and elevated interest rates. The Additional Buyer Stamp Duty implemented in April 2023 further dampened new home demand across the board in 2023. New private home sales reached some 13,027 units in 2021 but have fallen to a mere 6,421 units by 2023.

Looking at the numbers of Singaporeans buying new private homes, the number of buyers between the age group of 26 to 35 has seen a gentler decline in buyer numbers in comparison to other segments.

Between 2021 to 2023, the number of buyers aged 26 to 35 shrank by 59.5%, from 1,818 to 737. But for the age groups of 36 to 45, 46 to 55, as well as 56 and above, their respective declines were more noticeable at 69%, 72.9% and 71.8% respectively across the same period.

2. Singaporeans aged 36 to 45 still form the largest segment of new private homebuyers despite decline in numbers

Despite shrinking in number, Singaporean buyers belonging to the 36 to 45-year-old cohort have retained their dominance in the new private home market. In 2015, these Singaporeans accounted for 44% of new private residential property purchases; this was followed by Singaporeans between 46 to 55 years old, whose share of new private home transactions was 33% in the same year.

Fast forward to 2023, and the size of both buyer groups has dipped. Singaporeans belonging to the 36 to 45 age group now account for 37% of transactions, a 7-percentage point drop compared to eight years ago.

The shift is even more apparent for Singaporean buyers in the 46 to 55 age range, whose share of new private home transactions has fallen to 17% in 2023, marking a 16-percentage point decline.

3. The profile of new private homebuyers is skewing younger

In light of the latest changes in buyer demographics, the median age of Singaporean new private home buyers has distinctly exhibited a downward trend, possibly indicating that younger generations of locals will be playing a bigger role in Singapore’s new private residential market.

Chart 2: Proportion New Private Home Buyers by Age (2015 to 2023) and median age of buyers

Source: ERA Research and Market Intelligence

In 2015, the median age of new private home buyers was 45. Since then, it has traced downwards year on year over the last eight years, before reaching the current low of 39 years in 2023.

What is driving these shifts in new private homeownership?

1. Rising incomes are enabling young Singaporeans to achieve their private homeownership aspirations

According to official figures by the Ministry of Manpower, the median income for full-time employed residents increased for all age groups from 2016 to 2022.

In 2022, the median gross monthly income for full-time employed residents between the ages of 25 and 29 reached $4,446 years old, while those between 30 and 34 earned $5,792. Compared to the corresponding figures in 2016, this represents a 16.9% increase (up from $3,803) and a 15.8% increase (up from $5,000) for local residents in the respective age groups.

Over the same period, full-time employed residents aged 35 – 54 also experienced some of the biggest increases in monthly income, ranging from 19.8% to 53.8%. This observation is a possible glimpse into the future earning potential of younger Singaporeans – and consequently more confident of their ability to invest in new private homes.

New private homes are more accessible for young Singaporeans with growing income. New private homes allow for the progressive payment scheme which support young Singaporeans who may not have the income to manage the full mortgage payment at the beginning.

Table 1: Median Gross Monthly Income from Work (Including Employer CPF) of Full-Time Employed Residents in S$

Source: MOM, ERA Research and Market Intelligence

In tandem with this trend, the macroeconomic review published by the Monetary Authority of Singapore in October 2023, indicated that nominal incomes for middle-income workers – half of whom are between 25 to 49 years old in 2021 – grew more rapidly vis-à-vis other income groups.

Equally so, the healthy overall employment rate in Singapore is a likely contributor to the growing number of young local private home buyers.

2. Elevated interest rates have impacted mortgage eligibility across the board, but older Singaporeans are affected more

Since 2H 2022, interest rates in Singapore have soared in tandem with hikes in US Federal Reserve rates – in particular, the 3-month compounded Singapore Overnight Rate Average has risen by 170 basis points since 3Q 2022.

The resulting squeeze has impacted the mortgage eligibility of all Singaporeans, though the effects are more pronounced for older borrowers than those belonging to younger age groups.

Older Singaporeans face a double whammy: In addition to shrinking mortgage approvals – which translate into steeper upfront payments and a larger initial capital outlay – they also have to contend with shorter loan tenures as well as higher interest rates that contribute to higher monthly mortgage repayments.

This confluence of factors has cause some older Singaporeans to put off their home upgrading plans indefinitely.

3. Buyers nearing the income ceiling for BTO flats may find more options in new private homes

Young Singaporean couples whose combined monthly household earnings surpasses the $14,000 income ceiling for Built-to-Order (BTO) flats, could gravitate towards purchasing an Executive Condominium (EC) or new private property over a resale HDB flat.

Case Study with Couple A:

With a combined gross monthly income of $15,000 exceeding the BTO income ceiling, Couple A is currently deciding between purchasing a resale HDB flat, an EC or a private condominium.

Table 2: Max purchase price for a resale HDB flat or EC by gross monthly household incomes and prevailing MSR

Source: ERA Research and Market Intelligence

Assuming a 75% Loan-to-Value (LTV) limit, 30-year loan tenure, and 4% medium-term benchmark interest rate, Couple A can afford an EC or a resale HDB flat priced up to $1.25 mil based on the prevailing Mortgage Servicing Ratio (MSR) of 30%.

Table 3: Max purchase price for a private residential unit by gross monthly household incomes and prevailing TDSR

Source: ERA Research and Market Intelligence

In comparison, with all loan assessment factors held constant and the current Total Debt Servicing Ratio (TDSR) of 55% applied, Couple A will be to afford a new private home valued near $2.3 mil.

Consequently, the larger loan quantum available for new private homes allows Couple A to explore a wider range of properties, thereby increasing their chances of finding a private residence which matches their needs and aspirations.

That said, the substantial down payment and stamp duties associated with purchasing a new private home may pose a hurdle for younger Singapore adults.

Supposing that Couple A has chosen to purchase a $1.25 mil resale HDB flat, they will need to provide a down payment amounting to $312,500, of which $62,500 has to be paid in cash for a bank loan. After accounting for the Buyer Stamp Duty (BSD) based on prevailing rates, Couple A’s initial cash outlay will amount to $97,100 but they can obtain reimbursement for the BSD from their CPF accounts.

In comparison, if Couple A were to opt for a new private home valued at $2.3 mil, they would instead be required to fork out $575,000 for their downpayment. This translates into a minimum cash amount of $115,000, and with the BSD included, Couple A’s upfront cost for a new private home comes up to $199,600.

Table 4: Comparison of cash and CPF outlay for the purchase of a HDB resale flat versus a new private home

Source: ERA Research and Market Intelligence

As a result, this initial upfront investment may put new launches out of reach for young Singaporeans aged 26 to 30 years old, but not so much for their 31 to 35-year-old peers, who could have adequate downpayment for upgrading upon selling their first home.

Anecdotal observations by our salespersons suggest a small proportion of young Singaporean homebuyers received some form of financial help from their parents for their first home purchase. But in most cases, young Singaporeans were able to pay the equity portion of the purchase price themselves.

1. Cap on HDB resale price growth over the longer term could prompt more Singaporeans to consider private homes as an investment option

The reclassification of HDB flats announced in August 2023 reaffirms the Singapore Government’s stance to ensure public housing affordability in the long run.

These include the introduction of the Plus and Prime housing models – both of which come with tighter resale and rental restrictions such as a 10-year Minimum Occupation Period, in addition to a subsidy clawback when they are sold on the resale market for the first time. Furthermore, prime flats will see resale buyers subject to income ceiling cap.

All of these conditions could have a moderating effect on resale price growth in the future. Consequently, aspiring investors may shifting their attention towards private homes which could potentially yield better returns compared to HDB flats.

2. More young Singaporeans accumulate initial downpayment for property purchase through savings and investing at a younger age

A survey published by global investment firm Franklin Templeton targeting respondents aged 18 to 35 years old, revealed that 80% of young Singaporeans are current investors. Additionally, half of the 502 respondents also agreed that they should start investing at a younger age (50%), and that doing so is key to good financial planning (51%).

By doing so, this allow younger Singaporeans to accumulate the initial downpayment and purchase their first property purchase since real estate is still widely regarded as a stable investment asset among Singaporeans. Private home offers opportunities for capital appreciation and passive incomes, which closely resonates with the young Singaporeans’ views on investing and building financial security at an early age.

Is this trend of young Singaporean private homebuyers here to stay?

Though it is a certainty that there is a growing number of Singaporeans entering the private housing market at a younger age, it remains to be seen if this will be a persistent trend in Singapore’s real estate landscape over the long term.

On one hand, a possible slowdown in economic activity and moderating income growth could dampen the appetites and purchasing power of young Singaporeans. This could lead to a reversal in the current trend, as aspiring homeowners re-evaluate their financial priorities and adjust their budgets accordingly.

Beyond just looking at macroeconomic conditions, several other factors may influence young Singaporeans to buy private homes.

The combination of premium facilities as well as the higher potential investment upside of private properties may hold greater appeal for young Singaporeans. Likewise, young aspiring investors may be drawn to private homes, owing to the moderation on HDB resale price growth over the longer term with more stringent resale restrictions for HDB flats in the future.

The appeal of private homes remains alluring and there are many compelling factors for young Singaporeans to invest into new private homes. And with some 32 upcoming new private home launches in 2024, prospective homebuyers will be spoilt for choice and have ample options to choose from. With that, we can expect to see a growing number of young Singaporeans making their foray into the dynamic realm of the new private home segment going forward.

Disclaimer

The landed shophouse segment had some banner years but saw notable moderation in demand in 2023.

As at 20 December 2023, a total of 118 landed shophouses were transacted, amounting to a transaction value of $1.07 billion. Transaction volume and value have moderated by 35.9% and 32.6% year-on-year (y-o-y) respectively compared to 2022. At the peak in 2021, some 245 landed shophouses exchanged hands, totalling $1.84 billion.

Shophouse transactions have moderated in the second half of 2023 following rising prices and softer yields. Furthermore, the spat of high-profile money laundering cases uncovered in August led to heightened anti-money laundering checks on foreign buyers. The total landed shophouse market saw only 41 landed shophouse caveats, amounting to $349 million, lodged in 2H 2023.

Chart 1: Transaction volume and transaction value of landed shophouses

Source: URA as at 20 Dec, ERA Research and Market Intelligence

Steady rise in proportion of shophouses transacted in the $5mill and above price quantum

Some 45.5% of landed shophouses transacted between $5 mil and $10 mil, and another 24.6% of the landed shophouse transactions were more than $10mil in 12023.

The limited supply of landed shophouses has kept demand resilient over the years, supporting price growth. Based on caveats lodged, the average price of freehold landed shophouse has risen 57.8% since 2019. Freehold (FH) and 999-year leasehold shophouses accounted for 94% of landed shophouse transactions in 2023.

Chart 2: Price quantum of landed shophouse in the last ten years

Source: URA as at 20 Dec, ERA Research and Market Intelligence

Chart 3: Landed shophouse average price PSF

Source: URA as at 20 Dec, ERA Research and Market Intelligence

Singapore shophouse: An asset class that captivates foreign investors

Approximately 6,500 units of these landed shophouses fall under the conservation status, and owners of these properties must comply with strict guidelines around maintaining their façade and structure. Due to their scarcity, these shophouses are highly sought after by institutional investors and family offices.

Furthermore, the strong Singapore dollar, relatively low tax rates, and political stability make Singapore an attractive market for investors. For these reasons, the landed shophouses are coveted by institutional investors and family offices for capital appreciation and wealth preservation.

The most notable deal in 2023 would be the divestment of the remaining stake of the founder of 8M Real Estate to his partner, Crane Capital. Crane Capital is a Hong Kong-based real estate investment company with an international investor base. 8M Real Estate’s portfolio consists of shophouses in Singapore and is valued at $1.3 billion.

Popularity of Central Region shophouses

Freehold shophouses in Districts 1, 7 and 8, continue to see evergreen demand from investors largely due to its resilient rental demand.

These districts are popular for their eateries and bars that can command higher rents. Meanwhile, Districts 12, 15 and 19 tie for the fifth place, with seven transactions for each of the districts. Conservation shophouses are also popular among budding retailers drawn by their unique and eclectic charm.

Chart 4: Top five districts by transactions volume in 2023

Source: URA as at 20 Dec, ERA Research and Market Intelligence

Table 1: Top five landed shophouse transactions in 2023

Development	Address	District	Transacted Price ($)	Land Area (sqft)	Unit Price PSF ($)	Transaction Date
N.A.	322,324,330 ETC SERANGOON ROAD	08	62,500,000	9,042	$6,912	19 Jan 2023
DESKER ROAD CONSERVATION AREA	203,205,207 JALAN BESAR	08	38,500,000	6,378	$6,037	27 Sep 2023
TELOK AYER CONSERVATION AREA	5, 5A, 5B ANN SIANG ROAD	01	32,000,000	1,446	$22,136	14 Jul 2023
BOAT QUAY CONSERVATION AREA	37 BOAT QUAY	01	30,000,000	1,426	$21,034	19 May 2023
N.A.	433,435 GEYLANG ROAD	14	30,000,000	4,518	$6,641	27 Jun 2023

Source: URA as at 11 Dec, ERA Research and Market Intelligence

Tighter land use regulation for landed shophouse since July 2023

The Ministry of Law and Singapore Land Authority removed ‘Commercial & Residential’ zoning in July 2023. Going forward, foreigners and companies with foreign directors will require approval under the Residential Property Act to purchase landed shophouses. This change will not impact demand for shophouses zoned under ‘Commercial’.

Nonetheless, this amendment is expected moderate some foreign investors from diversifying into the shophouse segment from the residential market. Since April 2023, the Additional Buyers’ Stamp Duty (ABSD) for foreign buyers looking to buy residential properties doubled to 60%. This drove foreign buyer demand to the shophouse segment which is not subject to ABSD.

Shophouse demand to hold firm 2024

Shophouse demand is expected to hold firm despite rising prices and softer yields. Sustained interest from investors and strong holding power of shophouse owners will continue to support price growth, albeit at a moderated pace in 2024. The removal of ‘Commercial & residential’ zone will redirect foreign investors towards shophouses under the ‘Commercial’ zone instead.

The total landed shophouse transaction volume is projected to reach approximately $1.1 billion in 2023, and ERA projects the total transaction value to range between $1 billion – $1.2 billion in 2024.

Disclaimer

The Housing & Development Board (HDB) resale market has shown signs of stabilising even with price trending higher in 2023.

In the first nine months of 2023, the HDB resale price rose 3.8% in the first nine months of 2023 and peaked at 178.5 in 3Q 2023.

Transaction volume stayed fairly stable as of 26 December 2023, recording 24,650 resale transactions (3-room and larger) in 2023. This marked a 6% year-on-year (y-o-y) decline compared to 2022, where 26,254 resale transactions were lodged.

Chart 1: HDB Resale Price Index

Source: HDB, ERA Research and Market Intelligence

Chart 2: HDB Resale Transactions (3-room and larger flats)

Source: HDB as at 26 Dec 2023, ERA Research and Market Intelligence

Diminishing supply of MOP flats

The number of HDB flats that met the Minimum Occupation Period (MOP) has more than halved in 2023 compared to 2022. Between 2019 and 2022, the number of MOP units averaged 23,000 units per year, which bolstered demand in the residential market. Going forward, the supply of MOP units is set to diminish further potentially leading to a moderate supply of resale flats in the market.

Chart 3: HDB flats that met Minimum Occupation Period

Source: data.gov.sg, ERA Research and Market Intelligence

Million-dollar Flats more commonplace

HDB flats surpassing the million-dollar mark are becoming commonplace. As at 26 December, there have been 464 million-dollar flat transactions in 2023, an increase of 26% compared to 369 in 2022.

Majority of these million-dollar flat transactions are within mature estates such as Bukit Merah (61 units), Toa Payoh (57 units) and Kallang/Whampoa (53 units). Likewise, non-mature estates have started seeing more million-dollar flat transactions. Most notably, Woodlands saw 14 million-dollar flat transactions in 2023. Many of these million-dollar flats possess similar qualities that buyers value, such as a longer remaining lease, larger floor area and are located near transport nodes or amenities.

Chart 4: Million-dollar Flat Transacted by Flat Types

Source: data.gov.sg as at 26 Dec 2023, ERA Research and Market Intelligence

New classification of HDB flats to ensure sustainable price growth in the long term

In August 2023, the government announced the new classification of HDB flats that will take effect from 2H 2024. Instead of mature and non-mature estates, new BTO flats will be re-classified as Prime, Plus and Standard flats to better reflect locational attributes and demand. Prime and Plus flats will come with more subsidies but their potential upside will be capped as they are subjected to more stringent resale conditions. This includes a 10-year Minimum Occupation Period (MOP), a resale levy imposed and an income ceiling on resale buyers.

Build-to-Order launches drew some potential buyers away from resale market

HDB has collectively launched some 23,000 Build-To-Order (BTO) units in 2023 over four sales launches in 2023 to keep up with the demands of buyers. Another 4,090 BTO units will be launched in February 2024. Kallang Whampoa, Serangoon (Serangoon North Vista), and Queenstown (Ulu Pandan Glades) emerged as some of the popular BTO projects in 2023.

Change in BTO ruling

HDB announced the change in BTO ruling that will grant greater priority to First-Timer families. Apart from additional ballot chances, there will also be a higher allocation of BTOs and Sale of Balance Flat (SBF) for First-Timer families.

But in the event of non-selection of flat, HDB will cancel any existing applications by the same applicant for subsequent BTO/ SBF exercise. First-timer families that do not select a flat when given the chance will be considered second-timers for the next one year. Prior to this, some BTO applicants may have applied for multiple BTO/SBF exercises to increase their chances of securing their ideal home.

The recent changes in BTO ruling have resulted in a decline in the median application rate of BTO in the October and December sales launches. The rate for first timer families fell from 2.3 in May 2023 to 0.9 in October 2023’s sale launch. Similarly, the rate for second timer families fell from 30.4 in May 2023 to 8.7 in October 2023’s launch. With the heavier penalties for non-selection of flats, prospective buyers may become more selective around which sales launches to apply for, or it may redirect some buyers towards the resale market.

Chart 5: Overall median application rates BTO launches (3-room and above)

Source: HDB, ERA Research and Market Intelligence

HDB resale market set to see more muted price growth despite demand holding firm

The HDB market will see a moderate pace of price growth in 2024. This is in anticipation of a moderate supply of resale units being put up for sale with the diminishing supply of MOP units. Additionally, the elevated interest rate situation and higher cost of replacement homes may have delayed some HDB owners’ upgrading plans.

Nonetheless, demand for HDB flats is expected to hold firm, particularly those located in proximity to amenities and transport nodes. Existing resale flats, which are not affected by the more stringent resale conditions set for the upcoming Prime and Plus flats, will also be popular among buyers.

For the whole of 2023, ERA expects the total resale transaction volume to reach between 25,000 and 26,000 units, marginally lower than the 26,254 resale transactions in 2022.

Supported by firm resale demand, ERA projects the total resale transaction volume to reach between 26,000 and 27,000 units by end-2024, with resale prices rising by a more muted 3% to 5% range by end-2024.

Disclaimer

Rising cost and the elevated interest rates have moderated residential property demand across the board in 2023. Residential demand tapered further with the Additional Buyer Stamp Duty (ABSD) hike in April that curtailed demand from investors and foreigner buyers. The roundup of money laundering cases in August involving several high-value residential property transactions, has further led to the heightening of anti-money laundering checks. What’s next for the Singapore residential market?

But recent new sales performance seems to paint a different picture. J’den and Watten House, launched in November, have reported exceptional sales amid achieving benchmark prices. The residential market looks to have turned the corner with returning buyers’ confidence.

Projected economic expansion, low unemployment rates and healthy household balance sheet to support homebuying activities in 2024

Despite the global slowdown, Singapore has emerged as the bright spot in Asia Pacific. Its economic growth is forecasted to expand by 2.3% in 2023. The labour force is largely stable with overall unemployment rate projected to stay low, even as retrenchment increases. Both headline and core inflation could begin abating and are projected to average 3.0%-4.0% and 2.5%–3.5% respectively in 2024. For now, the Singapore household balance sheet remains healthy. All of these factors will help support homebuying activities.

Analysts are hopeful that the Federal Reserve of United States could cut interest rate by up to 75 basis point in 2024 in the second half of 2024. This could further boost the residential market and bolster transaction volume in 2024.

Residential home prices

The All-residential property price index reported a modest increase in 2023, registering a 3.9% growth in 3Q 2023 since the beginning of the year. CCR non-landed home prices, the laggard among the regions, fell by 2.0% over the first nine months of 2023. By contrast, RCR and OCR saw non-landed home prices rise 4.0% and 8.8% in the first nine months of 2023, largely attributed to higher new home prices in the areas.

Landed home prices have held steady, rising only 3.9% over the last nine months of 2023. This is in contrast to the last two years where the COVID-led boom sent landed prices soaring by 13.3% and 9.6% y-o-y in 2021 and 2022 respectively.

The all residential property price index is forecasted to grow between 4%-5% y-o-y in 2023, and another 5%-6% y-o-y in 2024. Meanwhile, landed home prices are anticipated to stay relatively stable and could see a potential growth of up to 2% by end 2024.

Chart 1: Singapore residential price index

Source: URA, ERA Research and Market Intelligence

Non-landed new homes

According to caveats as at 15 Dec 2023, the islandwide average new home price in 4Q 2023 reached $2,550 psf (per square feet), registering 8.9% growth y-o-y. After a dearth of new home launches since August, November new home launches such as J’den and Watten House, have reported exceptional sales performance amid achieving benchmark prices. J’den sold at a median price of $2,475 per square feet (psf) while Watten House reached a median price of $3,198 psf.

Despite an increase in new home launches this year, sales volume has moderated. In 2023, the new home market welcomed 22 new launches and one Executive Condominium (EC) launch. An estimated of 7,600 new homes (excluding EC) is launched in 2023, which is 52% higher than in 2022 (4,987 units).

The top five best-selling projects by units in 2023 are as follow: The Reserve Residences, Grand Dunman, Lentor Hills Residences, Tembusu Grand and J’den.

ERA projects total new home sale could reach between 6,500 and 7,000 in 2023, just a shade lower than 2022 where 7,099 new homes were sold.

Chart 2: New sale transactions and average price

Source: URA as at 15 Dec, ERA Research and Market Intelligence

Table 1: Top five Best-selling projects (excluding EC) in 2023

Project name	Total units	Tenure	Market Segment	Total units sold in 2023	Average price ($psf)	Percentage Sold
THE RESERVE RESIDENCES	732	99 Years	RCR	676	2,470	92%
GRAND DUNMAN	1,008	99 Years	RCR	622	2,522	62%
LENTOR HILLS RESIDENCES	598	99 Years	OCR	436	2,084	73%
TEMBUSU GRAND	638	99 Years	RCR	376	2,463	59%
J’DEN	368	99 Years	OCR	329	2,457	89%

Source: ERApro, URA as at 15 Dec, ERA Research and Market Intelligence

Buyer profile for new homes

The ABSD hike in April 2023, which included the doubling of ABSD for foreign buyers, has curtailed demand from foreign buyers across the board.

Among the market segments, CCR was the most impacted. Prior to the pandemic, foreign buyers accounted for close to one quarter of the buyers for homes in CCR, but this proportion has trended between 12% and 14% since 2020. RCR and OCR have seen similar declines, even as they reported a marginal decline in the proportion of foreign buyers.

Chart 3: Buyers profile by residential status (new homes)

Source: URA as at 15 Dec, ERA Research and Market Intelligence

Government Land Sales Programme
A total of eight residential and two EC sites were awarded in 2023. Some Government Land Sale sites have attracted up to six bids this year, and more developers have partnered up and put in joint bids. Both of the EC sites received nine bids.

Developers have been eager to replenish their land bank in 2023 as the unsold residential stock fell to only 17,576 (including ECs) units in 3Q 2023. Land costs have inflated and this paves way for higher new home prices in the near term. For instance, the Toa Payoh Lor 1 site closed in Nov, achieved a bid of $968 million, which worked out to a land rate of $1,360 per square feet per plot ratio.

New home outlook

In 2024, there could be as many as 32 new home launches and one EC launch scheduled in the pipeline. This could contribute to a total of more than 11,000 new homes.

The 2023 land sale performance suggests prices of new homes in 2024 will continue to grow at a more measured pace. ERA forecasts prices of new homes to grow between 3%-4% by end-2024 while demand for new homes in 2024 will remain largely similar to 2023, falling in the range of 7,000 to 8,000 units.

Table 2: Project launches in 2024

No.	Private Residential Projects	Region	Location	District	Tenure	Estimated number of units
1	Marina View Residences	CCR	Marina View	1	99 LH	683
2	TBC (Marina Gardens Lane GLS)	CCR	Marina Lane	1	99 LH	790
3	Newport Residences	CCR	Anson Road	2	FH	246
4	Former Peace Centre	CCR	Sophia Road	9	99 LH	240
5	21 Anderson	CCR	Anderson Road	10	FH	18
6	32 Gilstead Road	CCR	Gilstead Road	11	FH	14
7	Former Kew Lodge	CCR	Kheam Hock Road	11	FH	TBC
8	Former Central Mall / Central Square	RCR	Havelock Road	1	99 LH	366
9	Keppel Bay Plot 6	RCR	Keppel Island	4	99 LH	86
10	Former Golden Mile Complex	RCR	Beach Road	7	99 LH	TBC
11	The Arcady at Boon Keng	RCR	St Barbabas Lane	12	FH	172
12	TBC (Lorong 1 Toa Payoh GLS)	RCR	Lorong 1 Toa Payoh	12	99 LH	800
13	Ardon Residence	RCR	Haig Road	15	FH	35
14	Former Meyer Park	RCR	Meyer Road	15	FH	230
15	TBC (Jalan Tembusu GLS)	RCR	Jalan Tembusu	15	99 LH	840
16	The Hill @ One-North	RCR	Slim Barracks Rise	5	99 LH	142
17	The Hillshore	RCR	Pasir Panjang Road	5	FH	59
18	TBC (Bukit Timah Link GLS)	RCR	Bukit Timah Link	21	99 LH	160
19	TBC (Pine Grove GLS)	RCR	Pine Grove	21	99 LH	565
20	Former La Ville	RCR	Tanjong Rhu Road	15	FH	107
21	Former Bagnall Court	OCR	Upper East Coast Road	16	FH	113
22	Kassia	OCR	Flora Drive	17	FH	276
23	TBC (Tampines Avenue 11 GLS)	OCR	Tampines Avenue 11	18	99 LH	1,190
24	Former Chuan Park	OCR	Lorong Chuan	19	99 LH	900
25	TBC (Champions Way GLS)	OCR	Champions Way	25	99 LH	350
26	Lentor Mansion	OCR	Lentor Gardens	26	99 LH	533
27	Lentoria	OCR	Lentor Hills Road	26	99 LH	267
28	TBC (Lentor Central GLS)	OCR	Lentor Central	26	99 LH	475
29	TBC (Clementi Avenue 1 GLS)	OCR	Clementi Avenue 1	5	99 LH	501
30	Sora	OCR	Yuan Ching Road	22	99 LH	440
31	Hillhaven	OCR	Hillview Rise	23	99 LH	341

No.	Executive Condominium Project	Region	Location	District	Tenure	Estimated number of units
1	Lumina Grand	OCR	Bukit Batok West Avenue 5	23	99 LH	496

Source: ERA Research and Market Intelligence

Non-landed Resale and Sub sale market

Based on caveats lodged as at 15 Dec 2023, the islandwide average non-landed resale prices grew 5.7% in 2023 while the average non-landed sub sale prices grew 1.5% y-o-y.

Some 9,455 resale units were sold, the lowest transaction volume since 2020, and another 1,095 sub sale units were sold in 2023. Compared to 2022, resale transactions have moderated by 22.0% y-o-y. On the back of more new homes approaching completion, sub sale transactions have rose substantially by 56.7% y-o-y on the back of more new homes approaching completion.

The price gap between new home and resale home have prompted some buyers to turn towards the sub sale and resale market instead. RCR and OCR saw more newly completed homes transacted in recent months and this trend is expected to persist into 2024. Newly completed homes have taken centre stage as they are increasingly popular with buyers, given their brand-new condition and readiness for immediate occupancy.

Chart 4: Resale and sub sale transactions and average price

Source: URA as of 1 Dec, ERA Research and Market Intelligence

Upcoming home completions

For the whole of 2023, some 19,000 private residential units (excluding EC) are expected to complete, marking the highest annual supply completion since 2016. Another 10,000 units are schedule to be completed in 2024.

Chart 5: Private residential completions

Source: URA as of 1 Dec, ERA Research and Market Intelligence

Resale and Sub sale Outlook

The surge in new home completions could regulate the pace of resale price growth and drive transaction volume in 2024. For the whole of 2023, ERA forecasts the average non-landed resale and sub sale price could increase by 5% y-o-y, and by another 6% y-o-y in 2024. The total non-landed resale and sub sale are estimated to reach between 11,000 and 11,500 units in 2023, and between 12,000 and 13,000 units in 2024.

Landed property

The landed property segment reported subdued sales in 2023, primarily on the back of higher home prices and a lack of inventory. Landed home owners, who have stronger holding power and are facing higher costs of replacement homes, have been inclined to set higher prices and showed little urgency to sell. The demand, on the other hand, has remained fairly stable. In light of this situation, more landed deals have fallen through as buyers and sellers reached an impasse on home prices.

The total volume of landed property transactions has declined to 1,198 units, with the total transaction value reaching $6.9 billion. Compared to a year ago, both the transaction volume and transaction value have declined by 28.8% and 27.4% respectively. For the whole of 2023, the total volume of landed property transactions could reach 1,200 – 1,300 units, with the total transaction value expected to surpass $7 billion.

Looking ahead to 2024, the landed property segment is projected to see muted activities largely due to rising costs. ERA foresees total landed transaction volume could moderate to between 1,100 and 1,200 units, with total transaction value reaching between $6.0 – $6.5 billion. Landed home prices are anticipated to stay relatively stable and could see a potential growth of up to 2% by end 2024.

Chart 6: Landed property transaction volume and transaction value

Source: URA as at 15 Dec, ERA Research and Market Intelligence

Conclusion

Looking ahead to 2024, the new home segment could see as many as 32 new home launches and one EC launch scheduled in the pipeline. ERA forecasts prices of new homes could grow between 3%-6% by end-2024 largely attributed to higher land prices. Demand for new homes in 2024 could moderate to the range of 7,000 to 8,000 units.

More new home completions in 2024 could regulate the pace of non-landed resale price growth and drive transaction volume in 2024. ERA projects non-landed resale prices could increase by up to 6% y-o-y in 2024, with the total resale and sub-sale transactions ranging between 12,000 and 13,000 units in 2024.

The landed property segment is projected to see muted activities and stable price growth in 2023. ERA foresees total landed transaction volume could moderate to between 1,100 and 1,200 units, with total transaction value reaching between $6.0 – $6.5 billion. Landed home prices are anticipated to stay relatively stable and could see a potential growth of up to 2% by end 2024.

In conclusion, the private residential market appears to have turned a corner. Macroeconomic indicators are showing signs of cautious optimism in 2024, and there is quiet confidence that the residential market will recover in 2024. The second half of 2024 is projected to bring about more positive economic developments that could propel the Singapore private residential market further.

Disclaimer

May 2024 Developer Sales Report: New Home Sales Sales Fell Further Amid Fewer Launches

Best Performing New Launches

Buyer Profile

Luxury Properties (Non-landed Homes $5 mil and above)

New Home Sales Momentum to Remain Slow with No New Launches Slated for June

April 2024 saw a decline in new home sales due to muted new home launches.

Best Performing New Launches

Buyer Profile

Luxury Properties (Non-landed Homes $5 mil and above)

New home sales momentum to remain slow in May with only one boutique development being launched

Why has HDB launched the Resale Flat Listing Service?

1. Improve convenience for buyers and sellers of HDB flats

2. RFL to help verify HDB buyers and sellers

3. RFL to help manage sellers’ price expectations which will ensure a more sustainable property market in the long run

Are real estate agents still relevant with the launch of the Resale Flat Listing?

1. A real estate agent can help navigate the complex HDB sales process

2. Real estate agents to negotiate in your interest, and help brokerage the best deal

3. Business as usual for listing portals even though they are expected to a decline in HDB listings

4. Savings on advertisement cost for HDB real estate agents

5. Pre-qualified buyers for the listings

6. RFL will help to manage sellers’ price expectations

7. Providing a more accurate reflection on the available listings in the market

The birth of Sentosa Cove – there are only so many homes here

Two decades on, Sentosa Cove has blossomed into a self-sufficient upscale neighbourhood

How have home prices at Sentosa Cove fared so far?

Around 41% of Sentosa Cove transactions were profitable in the last ten years

Sentosa’s rental market

Sentosa Cove – the comeback kid

Future of work

Singapore’s reputation as a safe haven beckons High Net Worth Individuals (HNWIs)

Is it time to reduce ABSD for foreign buyers purchasing properties Sentosa Cove?

Sentosa Cove is on track to becoming a choice waterfront living enclave in the region

Have we piqued your interest in Sentosa Cove? Here are some exciting home options.

Cape Royale

DESCRIPTION

The Residences At W Singapore Sentosa Cove

Budget 2024 announced four changes that will affect home owners and the Singapore residential market. Here is what you need to know.

1. Enhanced Annual Value Band for Owner-Occupier Residential Properties to offer Property Tax Relief in 2025

2. Single Seniors concession on ABSD

3. Lower ABSD clawback rate for developers of housing developments that sell >90% within 5 years

4. Eligible families waiting for BTO can soon get voucher to rent flat in open market.

In summary

The rental market showed signs of stabilising since 2Q 2023 with the slower growth of the rental index. Meanwhile the HDB rental market stayed resilient. Has the rental market tipped in favour of tenants?

Private Residential Rental

More rental inventory expected with the slew of new home completions

HDB Rental Market expected to stay resilient in 2024

Cap in HDB rental supply going forward with fewer MOP units

Temporary relaxation of occupancy cap for rental of HDB flats and private residential properties

Implications on the rental market for various stakeholders

Rental market turns in favour of tenants in 2024

The market share of new private home buyers, aged 26 to 35 years old, more than tripled between 2015 to 2022.

The changing face of Singaporean new private home buyers

1. A rising proportion of young Singaporeans are buying new private homes

2. Singaporeans aged 36 to 45 still form the largest segment of new private homebuyers despite decline in numbers

3. The profile of new private homebuyers is skewing younger

What is driving these shifts in new private homeownership?

1. Rising incomes are enabling young Singaporeans to achieve their private homeownership aspirations

2. Elevated interest rates have impacted mortgage eligibility across the board, but older Singaporeans are affected more

3. Buyers nearing the income ceiling for BTO flats may find more options in new private homes

Case Study with Couple A:

1. Cap on HDB resale price growth over the longer term could prompt more Singaporeans to consider private homes as an investment option

2. More young Singaporeans accumulate initial downpayment for property purchase through savings and investing at a younger age

Is this trend of young Singaporean private homebuyers here to stay?

The landed shophouse segment had some banner years but saw notable moderation in demand in 2023.

Steady rise in proportion of shophouses transacted in the $5mill and above price quantum

Singapore shophouse: An asset class that captivates foreign investors

Popularity of Central Region shophouses

Tighter land use regulation for landed shophouse since July 2023

Shophouse demand to hold firm 2024

The Housing & Development Board (HDB) resale market has shown signs of stabilising even with price trending higher in 2023.

Million-dollar Flats more commonplace

New classification of HDB flats to ensure sustainable price growth in the long term

Build-to-Order launches drew some potential buyers away from resale market

Change in BTO ruling

HDB resale market set to see more muted price growth despite demand holding firm

Projected economic expansion, low unemployment rates and healthy household balance sheet to support homebuying activities in 2024

Residential home prices

Non-landed new homes

Buyer profile for new homes

New home outlook