Overview
According to flash estimates, private home prices hit a new high in Q4 2021 and grew by 10.6% for the whole of 2021. The price increase was driven by strong demand for private homes, economic recovery, a low-interest-rate environment, and excess liquidity in the market. For the full year 2021, developers sold 13,118 new private homes, while the private resale market saw over 20,000 homes transacted, breaking the resale volume of the past decade.
With the new cooling measures implemented from 16 December 2021 and upcoming interest rate hikes, private home prices are expected to rise at a more moderate and stable pace in 2022.
Singapore Private Home Prices
• The URA property price index flash estimate rose by 5% quarter-on-quarter (q-o-q) in Q4. This is the fastest quarterly growth since Q2 2010, when private home prices rose by 5.3% q-o-q.
• In Q4 2021, prices in all market segments increased. The price increase was led by the non-landed private residential segment, which rose by 5.4% q-o-q. Firm private resale prices and higher benchmark prices of several new launches in the central region, such as Jervois Mansion and CanningHill Piers, contributed to the overall increase in property values.
• Within the non-landed residential market, the Rest of Central Region (RCR) saw the largest price increase, with a 7.3% q-o-q growth in Q4 2021. This was mainly driven by new private home sales, especially the launch of CanningHill Piers in November.
• Private home prices in the Outside Central Region (OCR) saw a surprising increase, rising by 5.4% q-o-q. Among them, mass-market homes launched in Q4, including The Commodore, were well-received by homebuyers.
• Meanwhile, home prices in the Core Central Region (CCR) grew by 2.5% q-o-q in Q4 2021, the fastest quarterly growth for the CCR throughout the year. The price growth in the CCR was mainly supported by new launches this quarter and the opening of Vaccinated Travel Lanes (VTL), both of which helped boost sales activity from foreign buyers.
• Landed property prices rose by 3.7% q-o-q in Q4 2021. For the full year 2021, landed property prices increased by 13.1%, driven by a large number of high-value Good Class Bungalow (GCB) transactions during the year.
Singapore Private Home Transaction Volume
• Developers sold a total of 3,109 new private homes (excluding Executive Condominiums (ECs)) this quarter, a decrease of 12.4% compared to the 3,550 units sold in Q3 2021.
• RCR projects dominated new private home sales in Q4 2021. Of the new homes sold this quarter, 47.8% were from the RCR, followed by the OCR (33.1%) and the CCR (19.1%).
• The best-selling project this quarter was CanningHill Piers, which sold 574 of its 696 total units at a median price of S$2,886 psf.
• Meanwhile, the resale market saw a decline in Q4 2021, with 4,356 units sold, down 18.8% from Q3 2021 (5,362
units). The sales decline may be attributed to the Safe Management Measures (SMM) during the ‘Stabilisation Phase’, which affected property viewings and resale activities in Q4.
• The number of sub-sales in Q4 2021 remained at a relatively low level of 128 units, bringing the total private home transaction volume to 7,593 units (including new launches and resale homes).
• Singapore Citizens accounted for 82.5% of non-landed new private home sales in Q4 2021, down from 85.6% in Q3 2021. Meanwhile, the proportion of new non-landed private homes purchased by foreigners slightly increased from 3.7% in the previous quarter to 5.5% in Q4 2021. The increase in demand from foreign buyers may be driven by the opening of international borders in Q4 and the launch of new projects in the central region during the same quarter.
Singapore Private Home Rentals
• In Q4 2021, amid strong rental demand due to work-from-home trends and the return of more expatriates this quarter, many landlords found themselves in a better position to negotiate and raise their rental asking prices.
• Due to a slowdown in market activity towards the end of the year, leasing activity was relatively subdued in Q4 2021. A total of 23,489 lease contracts were signed in Q4 2021, with a total rental value of S$94 million.
• The rental market is expected to grow further in 2022. Given the higher Additional Buyer’s Stamp Duty (ABSD) rates, expatriates may choose to rent instead of buy, thereby creating more demand in the rental market.
Singapore Private Residential Market Outlook
• Leo Kwek expects private home price growth to slow to 3% to 5% in 2022. The new cooling measures will affect investment demand and ensure that prices move in a more sustainable manner. Apart from the more investor-reliant CCR, prices in other segments like the RCR and OCR should remain fairly firm, supported by genuine demand from upgraders and local residents, as well as a limited inventory of unsold mass-market homes.
• Leo Kwek predicts that between 9,000 to 10,000 new private homes and 15,000 to 16,000 resale units will be sold for the full year 2022.
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