Singapore Private Residential Market Report: Q1 2022

Private Residential Market Report Q1 2022

Overview

The growth rate in the first quarter of 2022 slowed down, but prices for private residential properties and HDB resale flats remained high. The new property cooling measures introduced in December 2021 were aimed at stabilizing the market and controlling demand from foreign buyers and investors with multiple properties. Uncertainty loomed over the market, leading to a drop in home sales and a slowdown in price growth in Q1 2022.

In the first quarter of 2022, developers sold fewer than 2,000 new private homes, while the private residential resale market saw about 3,100 units sold.

Prices

• The Urban Redevelopment Authority’s (URA) flash estimates for the property price index show that private home prices rose by a modest 0.4% quarter-on-quarter (QoQ) in Q1 2022, a significant slowdown compared to the 5% QoQ increase in Q4 2021.

• The landed private residential market led the price growth, increasing by 4% QoQ, primarily driven by the landed resale market and the launch of a new strata landed project, Belgravia Ace, this quarter. The 74 units sold in the project at an average transaction price of S$4.4 million likely pushed up the value of landed properties.

• Meanwhile, non-landed property prices fell by 0.6%, with prices in the central region declining. Weak demand from investors and foreign buyers, coupled with a surge in community COVID-19 cases, limited viewing activities.

• Prices in the Core Central Region (CCR) decreased by 0.5% QoQ in Q1 2022. As the cooling measures put pressure on demand for CCR homes from investors and foreigners, prices may continue to soften.

• Prices in the Rest of Central Region (RCR) fell by 3.0% QoQ, a reversal from the 6.7% QoQ increase in the previous quarter. In Q4 2021, the launch of Canninghill Piers at a benchmark price of nearly S$2,900 psf boosted RCR prices at the time.

• Despite the price drop in the central regions, prices of non-landed homes in the Outside Central Region (OCR) continued to grow at a relatively slower pace, rising by 1.9% QoQ in Q1 2022, compared to the 5.7% increase in Q4 2021.

• Housing demand from local buyers remained healthy, but tightening inventory of unsold homes and a limited number of new launches may have restrained sales and price growth in the OCR this quarter.

Transaction Volume

• According to caveat data from the Real Estate Information System (Realis), developers sold a total of 1,858 new private homes (excluding Executive Condominiums, ECs) this quarter, a 38% decrease from the 3,018 units sold in Q4 2021.

• RCR projects dominated new private home sales in Q1 2022, accounting for 47% of new sales. This was followed by the OCR at 33.4% and the CCR at 19.6% of total sales.

• The best-selling project this quarter was Normanton Park, which sold 262 units at a median price of S$1,857 psf.

• Meanwhile, after a stellar sales year in 2021 with an average of 5,000 units sold per quarter, only 3,097 private homes were resold in Q1 2022. The surge in Omicron community cases, which affected viewing traffic, may have led to the moderation in resale volume.

• Sub-sales in Q1 2022 remained relatively low at 100 units, bringing the total private home transaction volume to 5,055 units (including new sales and resales).

• In Q1 2022, Singaporean citizens accounted for 82.3% of non-landed new private home sales (excluding ECs). The proportion of foreign buyers was affected by the cooling measures, dropping from 5.3% in Q4 2021 to 4.7% in Q1 2022.

Private Residential Leasing Overview

• In Q1 2022, landlords will continue to have stronger bargaining power. Strong rental demand, mainly from expatriates, coupled with growing rental interest, has prompted many landlords to increase their asking rents.

• Leasing activity was quite robust, with over 14,000 rental contracts signed in the first two months of 2022, totaling S$61.5 million.

• The rental market is expected to grow further in the coming months, with demand primarily coming from foreigners moving to Singapore for jobs in emerging industries.

• Furthermore, as Singapore transitions to living with COVID-19 and with our stable political environment, the country’s appeal to foreign multinational corporations and expatriates may increase, prompting them to choose to relocate here.

Private Residential Market Outlook

• The easing of COVID-19 safe management measures and travel restrictions will help boost the property market in the coming quarters, promoting sales activities at showflats and increasing the likelihood of more foreign buyers returning to the market. Nevertheless, HDB upgraders and local residents will continue to be the main drivers supporting home sales.

• Several new projects will be launched for sale in Q2 2022, helping to drive sales volume and sustain prices. These include North Gaia EC and Piccadilly Grand. With rising inflation and construction costs, AnjiaSG expects new launch prices to remain firm.

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