3Q 2023 Private Residential Market
The private residential property price index increased by 0.8% qoq in 3Q 2023. The average quarterly price increase of around 0.3% over the past two quarters was significantly lower than the average quarterly increase of 2.1% in the whole of 2022. There are also fewer private residential units sold in both the primary and secondary markets as compared to the previous quarter.
Elevated interest rates and rising economic headwinds have dampened demand across the board in 3Q 2023. Increased ABSD rates have continued to moderate sales; particularly amongst investors who are looking to purchase their second or third properties.
On a positive note, today’s homebuyers have genuine housing needs and are seriously looking to commit as they source and compare amongst market offerings.
3Q 2023 Office Space Market
In 3Q 2023, prices of office space increased by 0.8% quarter-on-quarter (q-o-q), a further increase from the 1% from the previous quarter. Rental of office space also creased by 4.9%, the fourth consecutive quarter of increase.
Supply pipeline of office space also creased to 1.097 million sqm from 927,000 previously. Moving forward, supply is expected to increase by another 333,000 sqm by end 2024.
With a further 23,000 sqm taken up in 3Q 2023, office stock decreased by 42,000 sqm. With a healthy take up rate driven by strong demand, the vacancy rate decreased to 10% by the end of 3Q 2023 despite more supply in the market. This signals a slight recovery despite the cautious market sentiment.
3Q 2023 Industrial Property Market
In 3Q 2023, the industrial price index saw a quarterly increase of 1.4%, while the rental index rose by 2%. This quarter marked the 12th consecutive quarter of sustained growth in both industrial prices and rentals, underlining the market’s robust performance.
However, occupancy rates declined slightly to 88.9% across all industrial spaces, reflecting a marginal decrease of 0.2% from the previous quarter. This decline can be attributed to the slowdown in the manufacturing sector, which contracted by 5% year-on-year in 3Q 2023.
Additionally, the industrial sector witnessed new supply outpacing demand with several major projects completed in recent months. Despite facing economic headwinds, the industrial property segment is anticipated to remain stable as GDP growth is expected in 2023, albeit at a slower pace of 0.5% to 1.5%.
