2023 Singapore Property Market: Rejoice or Panic?

by | Apr 10, 2023

The Singapore property market has been a hot topic for many years now, with prices skyrocketing and cooling measures coming in place to control it. But what about the future of the Singapore property market? In this blog, we will explore 12 reasons why you should be happy or scared about the Singapore property market in 2023. From the potential for capital appreciation to concerns over oversupply, we will cover all the bases to help you make an informed decision on whether or not to invest in Singapore property. So sit back, relax, and let’s dive into what the future holds for Singapore’s property market!

Singapore’s property market experienced a wild ride in 2022.

2022 was a rollercoaster ride for the Singapore property market, with various factors affecting its stability. However, despite the chaos, prices are expected to remain strong in 2023. The rebounding sales in 2021 and demand for properties in Singapore are positive indicators that the property market will continue to thrive. Although some economists predict potential price falls in the future, the overall long-term prospects of the Singapore property market are promising. It is important to note that more housing supply is required to meet the current property demand and address affordability issues. Nonetheless, resale flat buyers can benefit from moderating prices in the near future and strong rental prospects are predicted to continue from 2022. In summary, the Singapore property market may have experienced an unpredictable year, but there are still many reasons to be optimistic about its future.

Rental market is driven by active hiring and low supply

The non-landed private residential rental market in Singapore had a good run in 2022 thanks to active hiring by companies and a tight supply of homes for rent. Despite economic chaos in the year, the property market managed to hit a three-year high with a quick rebound in sales. The limited supply of homes for rent has contributed to the robust growth in rents, with transient leasing demand due to the construction delays of new homes in 2020 and 2021. This has led to higher rental yields and an attractive investment option for property investors. However, the property market is expected to face challenges in 2023, particularly as housing affordability becomes a key concern for buyers. While the rental market is predicted to hold strong, more housing supply is needed to effectively ease property demand in Singapore.

Property market in Hong Kong

Looking at the property market in Hong Kong, it is not all sunshine and rainbows for the homeowners there. Hong Kong has held the title of being the world’s least affordable market for some time now. However, in 2023, it could experience a 30% price fall by the end of the year. This would be due to the government’s plans to redevelop many of the existing buildings to create more supply and therefore, lower property prices. While this may cause concern for Hong Kong residents, it could be seen as an opportunity for foreign investors to enter the market and make a purchase. On the other hand, Singapore’s property market may hold more stability in the upcoming year, with prices expected to remain strong despite some uncertainty in the economic climate. Overall, it is important to recognize both the potential risks and opportunities before making any decisions in the ever-fluctuating world of property investments.

A recession in developed economies within the next 12 months

The expectation of a recession in developed economies within the next 12 months could potentially impact Singapore’s property market. As the global economy experiences a slowdown, rising unemployment and lower household income could potentially reduce demand for properties. While Singapore’s property market hit a three-year high in 2021, the possibility of a recession could lead to a significant slowdown in rental and price growth in 2023. Additionally, the tightening of credit conditions and higher borrowing costs could potentially slow down investment momentum, impacting the property market. While a property downturn is not the base case, it is important for both buyers and sellers to be aware of potential economic risks and consider long-term investment strategies. Nonetheless, Singapore’s property market is expected to remain strong in 2023, and strong rental prospects could potentially outweigh any negative economic impact. However, it is evident that more housing supply is needed to effectively ease property demand in Singapore.

Singapore’s property market hit a three-year high in 2021 with quickly rebounding sales.

Despite the challenges and economic chaos triggered by the pandemic, Singapore’s property market has managed to hit a three-year high in 2021, with sales quickly rebounding. This is great news for property investors and developers who were initially worried about the market’s response to the pandemic. The quick rebound in sales suggests that buyers are confident in the long-term stability of the property market in Singapore. However, it’s important to note that future economic uncertainties might impact the property market, and buyers and sellers should keep a close eye on market trends and data to make informed decisions. Despite this, the current state of the property market offers great opportunities for buyers, sellers, and investors alike.

Economists predict further price falls for national home prices in 2023

Despite the positive demand effects seen in the Singapore property market in 2022, economists are predicting further price falls for national home prices in 2023. This could be attributed to the expectation of a recession in developed economies within the next 12 months, thereby potentially impacting the property market. While some buyers may benefit from moderating prices, affordability issues could have a negative impact on the property market in Singapore. More housing supply is needed to effectively ease property demand in Singapore, and strong rental prospects are predicted to continue from 2022. Overall, while the market may exhibit more of a buyer’s market in 2023, there are several possible downsides that buyers should be aware of moving forward.

Affordability issues could have a negative impact on the property market in Singapore.

Affordability issues pose a significant challenge to the Singapore property market in 2023. Despite the market’s resilience, rising property prices have led to concerns that the market may be overpriced, making it difficult for Singaporeans to purchase the property. As prices continue to climb, many Singaporeans are finding it increasingly difficult to afford a home. This could lead to a slowdown in the property market, as prospective buyers are priced out of the market. However, economists argue that this could present an opportunity for property investors looking to purchase resale flats at more reasonable prices, allowing them to capitalize on the potential for long-term capital gains. Solutions such as increasing the housing supply or reducing property prices through government intervention may be necessary to address affordability concerns and ensure a healthy property market in the years to come.

Resale flat buyers may benefit from moderating prices in 2023.

For those looking to purchase a resale flat in Singapore, 2023 could be a promising year. With prices expected to moderate, resale flat buyers may benefit from more affordable options on the market. This comes as the overall private residential market faces headwinds in the new year due to affordability concerns for buyers. While property prices are still expected to remain strong, a stronger supply of new homes could help to moderate the market and make it more accessible for those looking for affordable housing options. Strong rental prospects are also predicted to continue from 2022, making property investment in Singapore an attractive option for those looking to grow their portfolios.

Strong rental prospects are predicted to carry on from 2022.

Continuing from the strong rental market in 2022, experts are predicting that the trend will carry on in 2023. The demand for rental properties is fueled by the influx of foreign talent and expats, as well as the preference for flexibility among millennials. Landlords can expect to see faster rent growth in decentralized markets, with rental prices projected to grow by 3% to 5% year-on-year in 2023. This is good news for property investors who have turned their attention to more defensive property types in favor of long-term rental income. Nonetheless, developers and policymakers need to continue to address the supply imbalance, as more housing units are needed to effectively ease the property demand in Singapore.

More housing supply is needed to effectively ease property demand in Singapore.

Another key aspect of Singapore’s property market is the need for more housing supply. With increasing demand, the current housing stock may not be enough to meet the needs of residents. The government has taken steps to address this issue by ramping up the supply of land for residential development. However, this process takes time, and until more units become available, prices may remain high. The good news is that the government is committed to making housing more affordable and accessible, and has instituted policies to encourage developers to create more affordable housing options. This will help to ease the pressure on the property market and make homeownership more accessible to a wider range of Singaporeans.