Has the Singapore Property Market Peaked? We Found Two Compelling Tell-Tale Signs
The Singapore property market has seen insane growth in 2023 despite elevated interest rates and additional cooling measures.
As the saying goes, “What goes up, must come down”. In the case of the property market, it has its boom and bust cycles.
The bigger question on our mind is:
When?
Has the Singapore property market peaked? Let’s find out!
TL;DR: Has the Singapore Property Market Peaked?
Jump to:
- Current State of The Singapore Property Market
- Singapore Property Market Outlook
- Has the Singapore Property Market Reached It’s Peak?
Current State of The Singapore Property Market
Our property market has been on an upwards trend since the start of the year thanks to pent-up demand and a lack of housing supply.
According to the Urban Redevelopment Authority (URA), the private property price index has been on a steady rise:
As for the public housing market, the HDB Resale Price Index has also shot up:
This is despite elevated SORA interest rates and additional cooling measures from the government with an increase in Additional Buyer’s Stamp Duty (ABSD).
Singapore Property Market Outlook
When it comes to the private property market, we can see that the property price index has plateaued a little in the second quarter of 2023.
While this by itself doesn’t mean much, there are a few tell-tale signs that could signal that Singapore’s property market has peaked.
PropertyGuru’s Q3 Property Market Report
According to PropertyGuru’s latest report, which aggregated and indexed data from over 600,0000 property listings on PropertyGuru Singapore, the residential property market is demonstrating symptoms of deceleration as high interest rates and cooling measures temper prices and demand.
The sale price index has revealed that the median asking prices of listings on the PropertyGuru website rose 1.0% from Q1 2023 to Q2 2023, following a 0.7% increase from Q4 2022 to Q1 2023.
This is likely because sellers are still holding firm or raising their asking prices.
Meanwhile, the gap between expected prices and asking prices continue to hinder successful transactions. However, more sellers are willing to accept a lower price to complete the sale of their property in Q2 2023, especially if they needed to do so to avoid incurring the higher ABSD rates.
Hence, we will likely see prices oscillate between slight increases and decreases in subsequent quarters.
As for HDB Resale flats, the asking prices have slowed in Q2 2023, seeing a 0.6% quarter-on-quarter (QoQ) growth, as compared to a 1.6% QoQ increase in Q1 2023. Meanwhile, demand has declined 6.4% QoQ.
This suggests that the Government’s efforts to promote market stability via introducing cooling measures and increasing BTO flat supply are starting to show results.
Top Developers May Be Hinting a Slowdown Too
Another tell-tale sign that the market may be slowing down is to look at what developers are doing.
What better way to get an insight to the property market than studying companies who have on the ground knowledge?
After all, developers will know, with a high-level of accuracy, when sales are slowing down. The ones that don’t won’t survive.
According to the research by property experts at StackedHomes, they’ve found an indication that the property market is about to slow down.
A land plot at Jalan Tembusu received bids from just two developers. From the looks of it, the plot doesn’t seem to be a bad one.
The journalist at StackedHomes even went down to check it out for himself but couldn’t find any issues with it.
Yet, developers who are land-starved still played it cautious.
StackedHomes also mentioned that buyers have a lot of choice, but with new launches that have yet to sell out, it indicates that there is an upper limit of what buyers are willing to pay.
They concluded that there is “a change in the air” and that home prices are reaching the limits of what the market can tolerate.
Has the Singapore Property Market Reached It’s Peak?
Based on what we’ve gathered so far from two reputable sources, we are quite sure that the property market is at the very least, reaching its peak.
But exactly when it will reach the peak, it is anyone’s guess, just like timing the stock market.
Whether you are a property investor or a home buyer, we hope that this information has provided you with a greater insight into our current property market in 2023 and beyond.
What are your thoughts on Singapore’s property market? Share them with us in the comments below!
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