Housing prices unlikely to sustain momentum of past three years: Desmond Lee

Property costs have likewise regulated, Lee spots. Based upon the 4Q2023 flash quotes, the private residential consumer price index raised at a weaker speed of 6.7% in 2023, compared to 8.6% in 2022.

The authorities increase the building of brand-new Build-To-Order (BTO) and private real estate units to stabilize demand and supply. Approximately 21,400 HDB flats and 21,300 private housing units were completed in 2023, amounting to 43,000. Lee notes that it is the greatest amount of houses completed throughout both the HDB and nonpublic industry in a particular year – since 2018.

Lee, for that reason, concludes that real estate prices are not likely to sustain the momentum they have actually seen in the last 3 years. “So, I motivate customers to be sensible in their investments to prevent overextending themselves,” he warns.

The constraint in deal volume and rate development is expected to continue in 2024, influencing existing and prospective homebuyers, says Lee. “As PM Lee accentuate in his New Year’s message, we ought to be planned for our outside environment for being much less beneficial in the upcoming years.”

Geopolitical worries continue to weigh on the global economic climate, and Singapore will not be immune to these impacts, warns Lee.

In his opening address at the Building & Construction Authority-Real Estate Developers’ Association of Singapore’s Built Environment and Property Prospects Seminar on Jan 15, Desmond Lee, Minister for National Development and Minister-in-Charge of Social Services Integration, mentions that remarkable disruptions caused by the pandemic within the previous four years have actually led to a limited housing supply in the middle of solid demand for real estate.

The Arden price

Domestic home mortgage prices are currently between 3.7% and 4.4% and are anticipated to continue to be strong for an extensive time frame. Lee adds that it will certainly influence existing home owners, potential buyers, and overleveraged and debt-laden business.

He adds in that interest for exclusive and public residential markets has presented signs of moderating, and deal volumes have actually lowered. The total number of nonpublic housing and HDB resale deals have already fallen by around 13% and 4%, each, in 2023, compared to 2022.

In a similar way, HDB resale prices raised by 4.8%, less than half the 10.4% increase in 2022. The proportion of resale flat purchasers who bought cash-over-valuation (COV) also decreased substantially in 2023, cutting in half to 15% in 4Q2023 from nearly 30% in 4Q2022. Hence, most HDB resale buyers did not need to pay COV.

After a high of 43,000 brand-new residences accomplished in 2023, an additional 28,000 are arranged for finish this year, and an added 24,000 in 2025. The overall amount of public and personal homes completed from 2023 to 2025 is only under 100,000 units.

The BTO application price among first-timer households for all flat types in 2023 was 1.9, less than the pre-pandemic level of 3.7 in 2019.


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