The private and public housing markets have seen a significant recovery over the past year, with prices rising to new highs and record sales volumes recorded in the first 11 months of the year. According to data from the Urban Redevelopment Authority (URA), private home prices rose by 5.2% in the first three quarters of 2021, while HDB resale prices increased by 8.9%. Several factors contributed to the rise in sales and prices, including economic recovery, a low-interest-rate environment, and excess market liquidity.
Sales activity for many projects has been quite brisk this year, especially for properties in the Rest of Central Region (RCR) and Outside Central Region (OCR). Overall, more than 12,400 new private homes were sold in the first 11 months of 2021 (excluding Executive Condominiums, ECs), surpassing the annual sales figures of the past seven years. The demand for private homes is largely supported by HDB upgraders, a group of buyers who have taken advantage of the growth in the HDB resale market to sell their flats and purchase condominiums in the RCR and OCR.
The purchasing demand from HDB upgraders contributed to the buying momentum that was sustained for most of the year. In the second half of 2021, rising land prices from public land tenders played a significant role in driving sales, as buyers decided to enter the market before future new launches set new benchmark prices. The strong sales in 2021 further depleted the inventory of unsold homes to a 3-year low. This is especially true for homes in the OCR, where the unsold inventory was less than 4,400 units as of the end of the third quarter of 2021.
Besides the new private home sales market, other property sectors also had many highlights, such as the HDB resale market and the landed residential market, particularly Good Class Bungalows (GCBs). The HDB resale market saw rising prices, active sales, and a record 223 million-dollar transactions.
The economic recovery and the needs of homeowners have fueled the upturn in the HDB resale market, especially for young couples looking to avoid the uncertainty of extended waiting times and completion dates for new Build-To-Order (BTO) flats. Meanwhile, the landed residential market also achieved robust sales, including several record-breaking GCB transactions by high-net-worth individuals. A common driver for the renewed interest in both the HDB resale and landed property markets is the demand for more living space and larger homes brought about by the COVID-19 pandemic, as the work-from-home trend has led more people to spend more time at home.
On December 16, 2021, the government implemented the latest round of property market cooling measures for the private residential and HDB resale markets. These included revisions to the Additional Buyer’s Stamp Duty (ABSD), a tightening of the Total Debt Servicing Ratio (TDSR) threshold, and stricter Loan-to-Value (LTV) limits for HDB loans. The new cooling measures affect almost all types of buyers and will be the biggest obstacle to property market growth in 2022. Foreigners and property investors will be the first to be impacted. The Core Central Region (CCR) market will be hit hard, as most of the demand comes from foreigners and investors, who are the buyer groups most affected by the higher ABSD rates. CCR property prices may face downward pressure, and sellers and developers might offer discounts to attract buyers. Opportunistic buyers may take advantage of this price adjustment to upgrade to CCR properties.
The Singapore economy is projected to grow by 3% to 5% in 2022 but will face several headwinds, such as interest rate hikes, rising inflation, and uncertainty about the severity of the Omicron variant of COVID-19. With many countries battling a new wave of cases due to the spread of the Omicron strain, the initial optimism about reopening borders and economies has waned. It is expected that sales and price growth in Singapore in 2022 will be less active than in 2021, affected by the cooling measures and a reduced supply of new homes in surrounding areas. Home sales will largely be driven by demand from local buyers, especially upgraders and first-time homebuyers, as they are least affected by the revised cooling measures.
Table of Contents
2022 Singapore Property Prices Forecast
Singapore Property Sales Forecast 2022
Private Residential Property Market
Overview
Compared to previous years, private home prices reached a new high in 2021, with more units sold in both the resale and new sales markets. Sales were driven by high buyer confidence, stemming from economic recovery, a low-interest-rate environment, and excess market liquidity.
Prices and Forecast
- In the first three quarters of 2021, private home prices rose by 5.2%. AnjiaSG predicts that private property values will increase by 6% to 7% for the full year of 2021. By region, RCR prices grew the fastest, rising by 8.8% in the first three quarters of 2021, with an expected full-year growth of 10%, while prices in the CCR and OCR are expected to see relatively moderate growth this year.
- Given the recently introduced cooling measures, the growth of private home prices is expected to slow down in 2022, achieving a more modest 3% to 5% increase. Due to the high ABSD for foreigners and property investors, AnjiaSG expects prices in the CCR to face greater downward pressure compared to the RCR and OCR sub-markets.
- AnjiaSG estimates that overall CCR prices may slightly decrease or remain flat throughout 2022. Meanwhile, prices in the RCR and OCR should remain robust, given the tightening supply in these segments and the support provided by upgrading demand.
New Private Home Sales Market
- Developers sold 12,467 new private homes (excluding ECs) in the first 11 months of 2021, a volume that is on track to become the highest annual sales since the 14,948 new units sold in 2013.
- The sales momentum in the new launch market was primarily driven by several successful new projects in the OCR and RCR, namely Pasir Ris 8, Normanton Park, and CanningHill Piers. Rising land prices likely spurred home sales in the OCR and RCR in the second half of 2021, as buyers became concerned about future price increases.
- The fervent buying activity in the new launch market, along with the rapid depletion of unsold inventory, has had a spillover effect on the resale market and existing projects in suburban areas.
- RCR projects dominated new private home sales in 2021, accounting for about 41.6% of new units sold. This was followed by new private homes in the OCR (39.2%) and CCR (19.2%).
- The best-selling project this year was Normanton Park, which sold over 1,400 units out of a total of 1,862 units, at a median price of S$1,790 per square foot.
- In terms of buyer residency and nationality, Singapore citizens and Singapore Permanent Residents (SPRs) accounted for 95.5% of non-landed new private home sales in 2021. Meanwhile, non-landed new private homes purchased by foreigners made up 4.5% of sales. Despite the gradual and conditional reopening of borders, demand from foreigners may be subdued in the coming months due to the higher ABSD rates for foreign buyers.
- In 2021, approximately 75% of non-landed new private home sales were priced below the mass-market sweet spot of S$2 million. The vast majority of these transactions were for homes in the OCR (43.4%), followed by the RCR (41.2%) and CCR (15.4%).
Inventory and Future Launches
- As of the end of the third quarter of 2021, the inventory of unsold units has decreased to 17,140, the lowest number since the 16,031 units in the third quarter of 2017.
- As of the end of Q3 2021, the unsold inventory in the CCR, RCR, and OCR stood at 6,880, 5,878, and 4,382 units, respectively. Due to strong sales, the unsold inventory in the RCR and OCR has been rapidly declining over the past year.
- At the sales rate of the past year, the unsold inventory in the OCR could be completely sold out in about a year without any new supply injections.
- The upcoming Government Land Sales (GLS) programme for the first half of 2022 will focus on sites in the RCR and OCR on the Confirmed List, which will help support the supply of new private homes and meet residential demand in these areas.
- In 2022, approximately 8,000 to 9,000 new units are expected to be launched across various property projects. Some new projects that homebuyers can look forward to include Belgravia Ace, The Arden, the North Gaia EC project at Yishun Avenue 9, and the mixed-use development at Tanah Merah Kechil Link.
- In terms of new launch prices, RCR and OCR projects are expected to be launched at market benchmark prices, 5% to 8% higher than the launch prices in 2021, due to rising land prices and construction costs for developers. However, launch prices in the CCR may soften due to weakened demand from foreigners and investors following the ABSD rate adjustments.
New Private Home Sales Market Outlook
- The increased housing supply in 2022, combined with the new cooling measures implemented from December 16, 2021, will provide buyers with more choices and stabilize property prices that have risen sharply over the past year.
- In 2021, AnjiaSG expects new private home sales to be close to 13,000 units (excluding ECs); whereas in 2022, genuine housing demand from local residents such as HDB upgraders will lead to a slowdown in new private home sales to between 9,000 and 10,000 units (excluding ECs).
Resale Market and Outlook
- The secondary market performed well in 2021, with over 18,000 homes resold in the first 11 months of 2021 (resale homes: 18,131 units; sub-sales: 479 units).
- The most popular districts in the resale market include District 19 and District 15, which are popular residential areas for locals and HDB upgraders, achieving over 1,600 and 1,400 transactions respectively in the first 11 months of 2021. In terms of transaction value, District 10 unsurprisingly led with a value of S$3.9 billion, driven by high-end luxury homes and GCB transactions.
- In 2021, the sales volume in the resale and sub-sale markets is expected to exceed 19,000 units. In 2022, the resale transaction volume may reach 15,000 to 16,000 units.
Residential Rental Market
Overview
In 2021, the rental market maintained resilience in terms of transaction volume and rental values. With an optimistic economic outlook, the resumption of international travel, and a potential increase in the foreign workforce, rental demand is expected to grow further in 2022.
Private Residential Rentals
- As of the end of Q3 2021, the URA private residential rental index had grown by 7% over the past year.
- As working from home remained the default mode of work for much of 2021, many landlords were in a better position to raise rents amidst strong rental demand, especially for larger apartments and landed properties.
- In terms of rental volume, there were nearly 90,000 rental contracts in the first 11 months of 2021, and this is expected to reach over 96,000 leases for the full year.
- In terms of rental value, the total value of leases in the first 11 months of 2021 amounted to S$355 million, and is projected to exceed S$360 million for the full year.
- With the reopening of borders, rental demand is expected to weaken in December 2021 and January 2022. Expatriates are likely to return to their home countries for the year-end holidays, which may curb rental activity and median rents in the coming months.
Rental Market Outlook
- AnjiaSG is relatively optimistic about the rental market in 2022, based on the improving pandemic situation, the reopening of borders, and more positive business sentiment. With the opening of more Vaccinated Travel Lanes (VTLs) and the return of more expatriates to Singapore, rental demand for both private homes and HDB flats is expected to grow.
- Rents are likely to remain firm in 2022, as private residential rental transactions are expected to reach 100,000.
- Demand growth will be driven by expatriate professionals from high-value industries facing local talent shortages, such as the finance and technology sectors. As travel restrictions ease, more highly skilled foreign talent will be entering Singapore in the coming months to fill gaps in the labor market.
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