Landed home prices increased by 1.6 per cent in the third quarter of this year, compared with a 2.9 per cent rise in the previous quarter.
Resale transactions accounted for about 60.5 per cent of all sale transactions in the third quarter. There were 3,719 resale transactions, compared with 4,236 units in the preceding three months.
Ms Sun said not as many people bought private property this quarter due to “rising interest rates and higher prices”, pointing to URA data that showed a 9.7 per cent decline in sales volume between the second and third quarters of this year.
RENTS GREW AT FASTEST QUARTERLY PACE SINCE 2007
Rentals of private homes posted an overall increase of 8.6 per cent in the third quarter to hit a new high, after rising 6.7 per cent in the previous quarter.
In the first nine months of this year, rents have risen by 20.8 per cent, Ms Sun said. “Tenant budgets are stretched to new limits” as rents grew at the fastest quarterly pace since the third quarter of 2007, she added.
Rentals of non-landed properties in the core central region increased by 7 per cent in the third quarter, compared with 7.7 per cent in the previous quarter. Those in the rest of the central region rose by 9.6 per cent, up from the 5.9 per cent increase in the last three months.
Rentals of non-landed properties outside the central region increased by 8.8 per cent, up from 7.7 per cent, while landed properties rentals jumped 10.9 per cent in the third quarter, compared with 3.2 per cent in the previous quarter.
Ms Sun noted that with “demand far outstripping supply and units readily snapped up by the highest bidder”, many landlords have increased their asking prices above market value.
As a result, tenants are signing longer leases of up to three years “to secure units and lock in better rates”, Ms Sun explained.
She also said that rising interest rates and inflation are making the situation worse. “More landlords pass on their increased mortgage repayments and living costs to tenants … putting a squeeze on tenants’ rental affordability,” Ms Sun said.
She warned renters not to expect a “quick respite” from surging rent prices, as the trend of tenants signing longer leases will impact the number of homes available for rental, which may bump up demand.
What will also intensify demand are private homeowners who buy unsubsidised HDB resale flats, who will be affected by 15-month wait-out period. They are likely to rent in the interim, driving demand, Ms Sun said.
Singapore introduced several property cooling measures on Sep 30, including a new 15-month wait-out period for private homeowners who sell their property prior to submitting an application to buy a HDB resale flat.
With more homes slated for completion next year, the pace of rental price growth could slow from mid-2023, Ms Sun noted.
SUPPLY
Developers launched 1,455 uncompleted private residential units, excluding ECs, for sale in the third quarter, down from 1,956 units in the preceding quarter.
A total of 2,187 private homes, excluding ECs, were sold in the third quarter, a slight dip from 2,397 sold by developers in the preceding three months.
No EC units were launched for sale this quarter, while just 28 such units were sold. Last quarter, developers
launched 616 EC units for sale and sold 193.
A total of 3,619 units, including ECs, are expected to be completed in 2022, said URA, while another 20,098 units, including ECs, are expected to be completed in 2023.
In total, 28,800 units, including ECs, are expected to be completed in 2022 and 2023, close to three times the 10,400 units completed in 2020 and 2021.
“This will help to cater to housing needs in the immediate term,” URA said. “More supply with planning approval, totalling around 31,400 units as of the (third quarter of 2022), will be completed beyond 2023.”