Your search results

What Has Been The Most Significant Development In The Real Estate Market In 2022

Posted by Jayson Ang on December 24, 2022
| 0

At the start of 2021, many foresaw property cooling measures on the horizon, yet few knew precisely when or how they would take effect. Fast forward to September 2022 and the Singapore government stepped in with additional regulations, aiming to prevent homebuyers from overextending their budgets in a rising interest rate environment.

Indeed, the persistent increase of interest rates over the next two years has been a popular topic of discussion. One can’t help but wonder: will higher financing costs hinder property demand, resulting in lower prices?

Don’t Wait For The Perfect Time To Buy – Home Prices Won’t Be Decreasing In 2023!

What Has Been The Most Significant Development In The Real Estate Market In 2022, And Why?

The year 2022 was marked by a rapidly increasing pace of interest rate hikes as central banks all over the world, led by the US Federal Reserve, sought to curb rampant inflation. These hikes had a drastic effect on the Singapore Overnight Rate Average (SORA) used for pricing home loans, skyrocketing from 0.195% per annum in January to 3.095% by December. On top of that, numerous banks repeatedly revised their fixed home loan rates as interest rates rose higher and higher.

For first-time homebuyers and homeowners alike, the prospect of soaring home loan interest rates – with many never having experienced such a high rate before – can be a daunting one. After enjoying low rates below 2% for many years following the global financial crisis, some are now confronted with fixed package rates of over 4%, prompting worry, uncertainty, and second-guessing for those looking to purchase their first home, upgrade, or invest in a second property.

Amid the rising interest rate climate, the government has taken steps to promote caution among home buyers by introducing new cooling measures at the end of September 2022. Although we’ve seen dramatic increases in the Federal Reserve’s rates this year, it is likely they will dial back the magnitude of their hikes as we move into 2023. This may create a slower rise in home loan rates which could reach a plateau in the second half of 2023.

Although high interest rates may discourage some people from buying, upgrading, or investing, the truth is you can’t time the market perfectly. If you find a property that suits your budget and needs, there is still no reason to hold back – all that is needed is proper financial analysis, which I can help you with. So, don’t be afraid to take the plunge – even in high-interest times!

Are you in the market for a property? Let me be your guide! With my proprietary digital tools, I can help you make smart decisions – from assessing your financial capability to evaluating the potential capital appreciation of the property to finding out if it’s the perfect fit for you.

It Is Speculated That Come 2023, The Housing Market May Take A Downturn, Prices May Decline, And Demand May Be Hindered Due To A Potential Recession Or High Interest Rates

My outlook is that home prices won’t experience a drop in 2023. How so? A few different factors will serve to bolster prices;

As the market for new sales rapidly changes, it’s no surprise that selling price is a reflection of land and construction costs. In recent years, the cost of construction has increased by a staggering 30%, while Government Land Sales prices have stayed consistent, leaving slim margins for developers to lower prices. Additionally, there is a small inventory of unsold new homes with only 15,000 units (ex. ECs) awaiting approval as of Q3 2022. Assuming conservative annual sales forecasts of 7,500 units, this inventory will be gone within two years.

Observing an evident supply discrepancy in the OCR, developers don’t feel the urge to lower prices despite tight supply and undiminished demand.

There is a scarcity of properties available for resale in the market, a lack of supply. Homeowners are hesitant to put their property on the market due to three main factors:

1) The potential for a steady income through renting;
2) The high cost of replacing their home; and
3) The impact of government policy.

The implementation of the additional buyer’s stamp duty (ABSD) for second and subsequent home purchases has deterred those who own multiple properties from selling them, as the hefty ABSD will have to be paid in order to buy a new home in the future. The 15-month wait-out period introduced as part of the cooling measures in September is also leading private home owners to rethink their plans to sell and downgrade to an HDB resale flat. Thus, the limited supply in comparison to the consistent demand can only lead to one thing – a increase in prices.

Despite the fact that economic downturn and global headwinds may negatively affect consumer buying sentiment, I firmly believe that there are various factors that will keep driving the housing demand. These include an influx of new families, first-time buyers, foreign investors, and HDB upgraders. The job market is still tight and the majority of Singaporean households still possess robust buying power. Additionally, the Singapore property market is quite stable and the level of speculation is low. Thus, in my opinion, while home prices are not expected to decrease, the pace of increase may be slower in 2023.

What Are Some Potential Areas Of Growth Or Investment Opportunities To Consider In 2023?

If you are working within a tight budget for housing, you might consider the resale condo market. Over the past year, resale prices have increased more slowly compared to new launch prices. From 2021 till December 4, 2022, the average price of new launches jumped 23%, while the price of resale properties only rose 8%, as recorded by the caveats lodged (see Chart 1).

The contrast between new sales and resale transactions has created a large price gap, evidenced by Chart 1. In Q4, the difference in the average prices of non-landed resale properties and new launches was staggering, amounting to $1,074 psf. Specifically, new launch transactions had an average price of $2,655 psf, while resale properties averaged $1,581 psf. This was an immense increase from the $689 psf of 2021. Though resale prices may continue to climb in 2023, they likely won’t outpace new launches.

When it comes to buying a resale property, there are a few things to consider. It’s important to remember that resale prices tend to rise more slowly or even plateau over time. This is due to the fact that the value of a resale unit is usually determined by recent transactions in the same area, so it’s unlikely that a unit can fetch a price far above the market rate. In any case, an overpriced resale unit can be difficult to sell, as buyers will be drawn to other units within the same project or neighbourhood that are more reasonably priced.

If you’re considering investing in a 99-year leasehold property that’s been around for a while, bear in mind that maintenance costs and a declining lease balance should be taken into account.

A Glimpse of Average Unit Prices: Comparing Resale and New Sale Non-Landed Private Homes (S$ PSF)

By 2023, it is anticipated that an array of new condominium projects will be unveiled, bringing a greater variety of housing options to those struggling to find their perfect home in the current market due to the diminishing unsold stock. Developers will likely be mindful of prices in light of recent cooling measures and external economic pressures, yet it is forecasted that prices will remain on a gradual incline in the upcoming year.

It is probable that home prices in the Rest of Central Region (RCR) and Core Central Region (CCR) will escalate more than in the Outside Central Region (OCR). The prices of RCR are likely to be buoyed by projects that achieved land prices of above $1,300 psf ppr (such as Dunman Road, Jalan Tembusu, and Pine Grove), while CCR prices will be elevated by the launch of redevelopments from the city, including the former Maxwell House, AXA Tower, Fuji Xerox Towers, and the Marina View GLS site.

Despite the firm pricing, buyers will still be highly interested in new launches. Many are willing to pay a premium for these new properties, be it for the modern facilities and a new lease, or the first-mover advantage and potential capital growth it offers.

At the beginning of a launch, developers typically price their units competitively to attract buyers, but once sales reach a certain level, prices may start to climb – so if you purchased a unit during the launch weekend, you could already be in for a paper gain before the project is even finished!

Next year, regardless of your budget, there will be buying options available to you – be it in the private property market or the HDB resale segment. I can present you with potential options and offer thorough insight. If you are eager to learn more about property investment and financial planning, I strongly advise you to join my GROW Method Masterclass.

What Are The Potential Risks Or Challenges In The Residential Real Estate Market That Buyers And Investors Should Be Aware Of In 2023?

Next year brings a host of challenges, including the possibility of a global recession, geopolitical tension/conflict, and high inflation. With these issues, the risks could mean job insecurity or losses, a higher cost of living, and weak market sentiment. Home buyers and owners must take into account their financial capability – if a recession occurs, do they have the means to survive it?

When making a long-term commitment such as purchasing a home, it’s important to consider all factors: a home loan tenure could be anywhere from 20 years or even longer. To ensure you make an informed decision, evaluate your financial standing and determine your current and future goals. How much can you afford now? Think about any expenses you might incur or plans for the future – for instance, will you have more kids, take a break for schooling, buy a car, or start your own business? Whatever the case may be, it’s vital to be as thorough and knowledgeable as possible.

What amount should you put away for a rainy day, in case of a sudden interest rate surge, job loss, or family emergency? Are you considering buying a new property after a few years? What are the chances of re-selling the property you have your eye on?

The more meticulous your preparation is prior to the purchase of a property, the more assurance you can have that you have the financial capability to face market fluctuations. I am highly skilled to evaluate your monetary position and accompany you in your property investment venture. Do reach out to me for a consultation!

What Advancements In Data Analytics, Proptech Or Innovations Can We Expect In The Realm Of These Technologies In 2023?

I am equipped with the RAM financial assessment tool to assist clients with planning ahead, assessing their financial position and risk tolerance, setting buffer funds and reviewing their portfolio. This tool provides a thorough risk analysis and generates a tailored report for each client – an essential step to avoid exposing oneself to uncertainties and to effectively manage one’s risk exposure in any investment.

My clients can rest assured that their property purchase decisions are informed and secure, thanks to the RAM tool which ensures that all financial factors are taken into account; no stone is left unturned, and no risk is left unchecked!

In 2022, Investment Suite – a dynamic mobile app providing the ultimate real estate experience on the go. My clients will be able to access transaction data and trends from anywhere, as well as find out the transaction history for residential properties in Singapore, plot the transacted price trend over time and even filter data by number of bedrooms – all within the app!

My clients can gain invaluable insight into sales trends of condo projects with our stack view feature. If they wish to find out about the amenities, schools, and SORA rate of a particular property, my digital tool provides them with all of the information they need – making it a true asset to their experience.

You May Also Like …


What’s Next for HDB Owners?
All Buying Tips

What’s Next for HDB Owners?

Buying a home always seems daunting especially such it is a big-ticket item and the prices for private homes can easily...
Read More
What Type of Properties Can a Permanent Resident PR Buy in Singapore?
All Buying Tips

What Type of Properties Can a Permanent Resident PR Buy in Singapore?

The type of property a person can buy in Singapore depends on their residency status. Singaporeans can purchase any type...
Read More
A Beginner’s Guide to Homebuying: How to Choose the Perfect Property
All Blog Posts Buying Tips

A Beginner’s Guide to Homebuying: How to Choose the Perfect Property

Properties that appear to have it all - located near an MRT station, close to top-notch schools, in the heart...
Read More
A Guide to Purchasing a New Launch Condo in Singapore in 2023
All Buying Tips

A Guide to Purchasing a New Launch Condo in Singapore in 2023

The trend of buying new launch properties is growing rapidly as people see it as a way to enhance their...
Read More
CPF Accrued Interest On Housing: Learn What It Is and How to Calculate It
All Blog Posts Buying Tips

CPF Accrued Interest On Housing: Learn What It Is and How to Calculate It

Calculate the amount of CPF accrued interest you owe on your housing with ease! Learn what it is and how...
Read More
Why The URA Master Plan Matters For Your Property’s Potential
All Buying Tips

Why The URA Master Plan Matters For Your Property’s Potential

Regarding the URA Master Plan, it's commonplace for most property owners to be in the know mostly about the significant...
Read More
Debunked! 6 Popular Property Myths of 2023, Including the 99-1 Loophole – Legal or Not?
All Buying Tips Opinion

Debunked! 6 Popular Property Myths of 2023, Including the 99-1 Loophole – Legal or Not?

As we cruise out of 2023, it seems like a few wonky ideas about our beloved property market are popping...
Read More
Maximize Your Property Investment: 5 Questions to Ask Your Real Estate Agent in Singapore
Mandarin Top 5

Maximize Your Property Investment: 5 Questions to Ask Your Real Estate Agent in Singapore

Buying a property in Singapore can be a daunting task, especially for first-time buyers. It is important to have a...
Read More
Checklist for First-Time Homebuyers in Singapore: A Guide to Viewing Condos
All Blog Posts Buying Tips

Checklist for First-Time Homebuyers in Singapore: A Guide to Viewing Condos

I've been asked lots of questions on what to consider when viewing a condo and what to ask the listing...
Read More
Should I Buy In A Newly MOP HDB Or An Older Resale HDB?
All Blog Posts Buying Tips

Should I Buy In A Newly MOP HDB Or An Older Resale HDB?

For Singaporeans, the challenge of securing an affordable yet desirable place to purchase and call home is an ever-present one....
Read More
The Sneaky Role of Property Appraisals in Shaping Singapore’s Home Prices
All Buying Tips Opinion

The Sneaky Role of Property Appraisals in Shaping Singapore’s Home Prices

At times, it feels less like a precise science and more like tossing a set of tarot cards into a...
Read More
Quick Guide for Condo Sellers: Timeline to Sell Condo in 2023
All Blog Posts Buying Tips

Quick Guide for Condo Sellers: Timeline to Sell Condo in 2023

Selling a condominium in Singapore can be more of a challenge than selling an HDB flat, as you are dealing...
Read More
Can Your HDB Flat Safeguard Your Retirement?
All Buying Tips

Can Your HDB Flat Safeguard Your Retirement?

Today we will take a look at the HDB market to find out what are your options as an HDB owner and...
Read More
7 Essential Steps to Sell Your House in Singapore
All Opinion Selling Tips

7 Essential Steps to Sell Your House in Singapore

If you are planning to sell your house, it is advisable to prepare it properly for sale, whether or not...
Read More
Experience Singapore’s Best: 5 Districts with Unmatched Access to Shopping, Dining, and Entertainment
Mandarin Top 5

Experience Singapore’s Best: 5 Districts with Unmatched Access to Shopping, Dining, and Entertainment

Here are my top 5 picks for districts in Singapore that offer easy access to some of the best shopping...
Read More
Top 5 Things to Do in Singapore on a Rainy Day
Mandarin Top 5

Top 5 Things to Do in Singapore on a Rainy Day

Singapore, the beautiful island city-state, is known for its sunny weather and stunning attractions. However, even in this tropical paradise,...
Read More
Planning for Retirement: Considerations for Downsizing Your Property
All Blog Posts Buying Tips

Planning for Retirement: Considerations for Downsizing Your Property

Maybe you're ready to take a step towards retirement and achieve your financial goals ahead of schedule. Lots of people...
Read More
Ready To Make The Jump From HDB To Condo? This Guide Has All The Answers!
All Blog Posts Buying Tips

Ready To Make The Jump From HDB To Condo? This Guide Has All The Answers!

Congrats! If you’re reading this article, it's likely that you are taking the next step and upgrading your HDB flat...
Read More
Ouch! How Owning a Million-Dollar Home Can Sting with a Whopping $300K Interest in Just a Decade!
All Opinion Selling Tips

Ouch! How Owning a Million-Dollar Home Can Sting with a Whopping $300K Interest in Just a Decade!

Gotta admit, the whole subject of financing, especially home loans, can be a snooze fest. It's all sorts of complex...
Read More
SP Utilities Guide – Quick Guide To Setting Up Utilities In Singapore For Your New Home
All Blog Posts

SP Utilities Guide – Quick Guide To Setting Up Utilities In Singapore For Your New Home

If you're an owner or tenant moving into a new home in Singapore, setting up utilities doesn't have to be...
Read More
1 2 3 14

Compare Listings