Housing prices unlikely to sustain momentum of past three years: Desmond Lee
Domestic home mortgage rates are currently between 3.7% and 4.4% and are anticipated to stay elevated for a prolonged duration. Lee includes that it will certainly affect existing homeowners, prospective buyers, and overleveraged and debt-laden companies.
The state ramped up the building of brand-new Build-To-Order (BTO) and nonpublic housing units to adjust need and supply. Near 21,400 HDB apartments and 21,300 private real estate units were completed in 2023, amounting to 43,000. Lee marks that it is the biggest amount of houses completed throughout both the HDB and exclusive markets in a specific year – as 2018.
Property prices have likewise moderated, Lee spots. Based on the 4Q2023 flash assessments, the nonpublic household consumer price index improved at a slower rate of 6.7% in 2023, matched up to 8.6% in 2022.
After a high of 43,000 new houses finished in 2023, one more 28,000 are set up for finish this year, and an extra 24,000 in 2025. The total number of public and personal homes performed from 2023 to 2025 is just under 100,000 units.
The balance in transaction volume and rate development is expected to proceed in 2024, affecting occurring and prospective homebuyers, says Lee. “As PM Lee emphasize in his New Year’s message, we need to be planned for our outside setting for being less favourable in the upcoming years.”
He includes that demand for nonpublic and public household markets has presented indicators of moderating, and purchase volumes have lowered. The overall number of private real estate and HDB resell deals have already dropped by about 13% and 4%, respectively, in 2023, contrasted to 2022.
In a similar way, HDB resale rates raised by 4.8%, less than half the 10.4% raise in 2022. The proportion of resale flat buyers who paid cash-over-valuation (COV) even decreased considerably in 2023, halving to 15% in 4Q2023 from just about 30% in 4Q2022. Thus, most HDB resale buyers did not need to pay COV.
Lee, consequently, closes out that real estate rates are unlikely to sustain the momentum they have observed in the last three years. “So, I motivate buyers to be sensible in their investments to prevent stressing themselves,” he warns.
The BTO application price amongst first-timer families for all flat types in 2023 was 1.9, beneath the pre-pandemic rate of 3.7 in 2019.
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Geopolitical unpredictabilities continue to weigh on the worldwide economic situation, and Singapore will not be unsusceptible to these results, tells 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, says that unmatched interruptions brought on by the pandemic within the last 4 years have caused a tight real estate supply amid strong demand for mortgage.
