Singapore Real Estate Sector - RHB Invest 2023-01-17: Stable But Sluggish Year Ahead

Singapore Real Estate Sector - Stable But Sluggish Year Ahead

Singapore Real Estate Sector - RHB Investment Research | SGinvestors.ioAPAC REALTY LIMITED (SGX:CLN) CITY DEVELOPMENTS LIMITED (SGX:C09)
  • The local residential market is set to stay resilient in 2023 despite rising interest rate pressures, as low inventory and supply, relatively healthy household balance sheets, and rising rental yields limit the downsides. 2022 property prices came in ahead of our expectations at 8.4%.
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Primary market prices to remain steady…

  • Despite rising interest rates impacting buyers’ affordability, we expect new launch prices to remain on a slight uptrend based on three key factors:
    1. rising land acquisition costs,
    2. developers’ low inventory levels and higher cost pressures that limit room to cut prices, and
    3. upgrader demand and higher rental yields supporting the market.
  • The number of new 2023 launches are set to double that of 2021, at ~10,000 units, which should provide more buying choices and alleviate some of the price pressures seen last year. As a result, buyers are set to be more selective, with projects having the right amenities – e.g. near good schools and mass rapid transit (MRT) stations – seeing strong demand. We expect new launch prices in 2023 to be 0-3% higher vs 2022.

…while resale prices could likely see slight moderation.

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  • Anecdotally, we see a notable increase in the turnaround time for the sale of resale units, which we attribute mainly to the growing pricing expectation mismatch. The downside though is supported by the relatively strong household balance sheets and Singapore’s rising status as a global financial hub.
  • Similarly, we expect the Housing & Development Board’s (HDB) resale segment (especially larger units) will be impacted by the latest cooling measures.
  • Overall, we expect resale prices to be in the -3% and +1% range.

Resale volume to continue slowing down.

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Vijay Natarajan RHB Securities Research | 2023-01-17

More views on outlook of real estate sector:
Analyst Reports on Singapore Property Sector

SGX Stock / REIT Search


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