Property analysts expect property prices to continue climbing next year, but a strong supply of new homes may help moderate the anticipated spike.
For new private homes, the jump could be as high as 12 per cent according to one estimate, but others expect a rise of between 5 and 8 per cent. The projected rise for resale Housing Board flats is 5 to 11 per cent, according to analysts.
Huttons estimates that the supply of new private homes will pick up in 2023 to an estimated 10,000 to 12,000 units spread over 40 launches. This compares with 4,500 to 5,000 units in 2022 and 10,496 units launched for sale in 2021, according to Huttons.
In addition, a bumper crop of more than 20,000 landed, non-landed, and executive condos may be completed, which could help stabilise prices, according to OrangeTee’s Market Outlook.
With more launches, OrangeTee estimates that new private home prices may rise by 5 to 8 per cent next year, which is slower than the hike of 10 to 11 per cent expected in 2022.
Analysts at PropNex are more cautious, and think that the growth in private home prices in 2023 is expected to moderate, rising at a slower pace of 5 per cent to 6 per cent, due to global headwinds and high interest rates.
But ERA Realty’s head of research & consultancy Nicholas Mak foresees the increase to be greater and hit up to 12 per cent year on year, pushed up in part by rising development costs.
“The rising development costs will dissuade developers from lowering the prices of their new residential launches,” said Mr Mak.
Due to a record low number of unsold homes in the market and rising costs, some developers will test new benchmark prices by launching their new projects at higher prices than nearby projects launched earlier, he said.
None of the analysts who replied to CNA’s queries expect a price correction in the private resale market in 2023 for several reasons.
Ms Christine Sun, senior vice president of research & analytics at OrangeTee said that strong employment sustains sellers’ pricing power and they will not lower prices too much.
And while economic growth is predicted to slow, official estimates indicate that the possibility of a severe recession is low, while the labour market remains tight, said Mr Mak.