Q3 2021 Private Residential Property Report
Overview
Despite the tightened COVID-19 safe management measures under Phase 2 (Heightened Alert) in July and August, private home prices reached a new high in Q3 2021, with a significant number of units sold in both the resale and new launch markets. The price growth was in line with expectations, driven by strong demand for resale homes and new launches in the OCR this quarter. The private resale market saw over 5,300 homes change hands, marking the highest sales volume in a decade.
Market observations indicate that buyer confidence has generally remained intact, buoyed by economic recovery, a low-interest-rate environment, and strong market liquidity.
Prices
- The value of private homes grew slightly faster in Q3 2021. According to the URA Property Price Index, private home prices rose for the sixth consecutive quarter, climbing by a modest 1.1% quarter-on-quarter (QoQ), higher than the 0.8% increase in the previous quarter.
- The price increase in the third quarter was led by landed residential properties, which rose by 2.6% QoQ, rebounding from a -0.3% contraction in the previous quarter. In Q3 2021, several record-breaking transactions and growing demand for Good Class Bungalows (GCBs) helped push up the overall value of landed homes.
- Meanwhile, the non-landed property segment grew by 0.7% QoQ, with the RCR growing by 2.6% QoQ, while the CCR and OCR experienced slight QoQ contractions of -0.5% and -0.1% respectively.
Transaction Volume
- Developers sold a total of 3,550 new private homes (excluding Executive Condominiums, or ECs) this quarter
— a 19.7% increase from the 2,966 units in Q2 2021. - The surge in new launch sales was due to the success of some large OCR projects (namely Pasir Ris 8) and the rising land bid prices in recent Government Land Sale (GLS) tenders, which sparked a buying frenzy in the OCR market. The robust buying activity, coupled with dwindling inventory in OCR projects, has spilled over to other RCR projects and resale homes in fringe areas.
- In terms of new launch sales, OCR projects dominated sales in Q3 2021. This quarter, 57.4% of new homes sold were located in the OCR, followed by the RCR (30.1%) and CCR (12.5%).
- The best-selling project this quarter was Pasir Ris 8, which was sold out as of August, with a median price of S$1,627 per square foot for the quarter.
- The resale market performed exceptionally well in Q3 2021,
with a total of 5,362 homes changing hands — one of the highest quarterly resale volumes since Q2 2010, when 5,253 resale homes were sold. - The total transaction volume for private homes in Q3 2021 was 9,083 units (including new and resale properties), while sub-sales remained relatively low at 171 units.
- Singapore citizens accounted for 85.3% of non-landed new private home sales in Q3 2021—up from 82.2% in Q2 2021. Meanwhile, the proportion of foreigners purchasing new non-landed private homes fell from 4.5% in the previous quarter to 4.1% in Q3 2021. With the opening of international borders and new city-fringe launches expected in the fourth quarter, housing demand from foreigners may increase in the coming months.
Private Residential Leasing
- According to the URA’s private residential rental index, rents rose by 1.8% in Q3 2021, a slower pace than the 2.9% growth in Q2.
- Unless any new cooling measures are introduced, Singapore property agent Ku Swee Yong expects that for the full year of 2021, nearly 13,000 new private homes and over 19,000 resale units will be transacted. million, a 2.5% increase from the previous quarter (S$89.3 million).
- The landed residential market led the rental growth, with a 4.7% QoQ increase, while non-landed residential rents rose by 1.4% QoQ.
- With work-from-home arrangements still in place in Singapore, many landlords have been able to raise rents amid strong leasing demand, especially for larger homes.
- Rental activity was quite active in the third quarter. A total of 26,759 rental contracts were signed in Q3 2021, an 11.9% increase from the 23,923 contracts in the previous quarter. In terms of rental value, the total value of leases in Q3 2021 reached S$111 million, a 19.3% increase from the previous quarter (S$93.1 million). This is a historical high for quarterly rental value, with the previous high being S$107 million in Q3 2019.
- With the opening of borders, leasing demand is expected to weaken in the coming months, as expatriates are likely to return to their home countries during the holiday season, which may curb rental activity.
Private Housing Market Outlook
- Singapore property agent Ku Swee Yong projects that private home values will climb by 6% to 7% for the full year 2021. Healthy housing demand and dwindling inventory will support property prices. As of the end of Q3 2021, there were 17,140 unsold units (excluding ECs).
- Unless any new cooling measures are introduced, Ku Swee Yong expects nearly 13,000 new private homes and over 19,000 resale units to be transacted for the full year 2021. million, a 2.5% increase from the previous quarter (S$89.3 million).
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