In Summary

The private residential and public housing markets
have had a remarkable year of recovery, with prices
growing to an all-time high and achieving record-high
sales volumes in the first 11 months of the year.
According to data from the Urban Redevelopment
Authority (URA), prices of private residential homes rose
5.2 per cent in the first three quarters of 2021, while
resale prices of HDB flats rose by 8.9 per cent in the
same period. There were a number of factors which had
contributed to the stellar sales volume and rising price.
Among them, the economic recovery, low interest rate
environment, and the excess liquidity in the market.
Sales were brisk across many projects this year
particularly in the Rest of Central Region (RCR) and the
Outside Central Region (OCR). In all, more than 12,400
new private homes, excluding executive condominium
units (EC), were sold in the first eleven months of 2021 –
surpassing the annual sales recorded over the past
seven years. Demand for private homes were largely
supported by HDB upgraders who have sold their HDB
flats – to capitalise on growth in the HDB resale market
– and bought condominiums in the suburbs and the
city fringe.
The demand from HDB upgraders contributed to the
buying momentum which was sustained for most parts
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 to
pick up units before new benchmark prices are
introduced at future launches. The strong sales
witnessed in 2021 had further depleted the inventory of
unsold homes, particularly for the OCR, where the
unsold inventory was less than 4,400 units as of the end
of Q3 2021.
Besides the new home sales market, there were a
number of bright spots in other property segments
such as the HDB resale market, and the landed housing
segment, in particular, the Good Class Bungalows
(GCBs). The HDB resale market enjoyed rising resale
prices and brisk sales, including a record number of
million-dollar flat transactions.
The rising HDB resale market was fuelled by the
economic recovery and demand from homeowners,
particularly young couples who wanted to avoid uncertainties arising from completion delays and
extended waiting times for new Build-to-Order (BTO)
flats. Meanwhile, the landed housing segment also
enjoyed healthy sales including several
record-breaking transactions of GCBs purchased by
high net-worth individuals. One common driving point
for the renewed interest in the HDB resale market and
landed home market was the pandemic-induced
demand for spacious homes, amid the
work-from-home trend and people spending more
time at home.
On 16th December 2021, the government implemented
its latest round of property market cooling measures
targeted at the private residential and HDB resale
markets. The package of measures comprises revisions
to the Additional Buyer’s Stamp Duty (ABSD) rates,
tighter Total Debt Servicing Ratio (TDSR) threshold, and
tighter LTV limit for HDB loans. The new cooling
measures virtually affect all categories of buyers, and
will be the most significant stumbling block to the
property market growth in 2022. The groups which bear
the brunt of the cooling measures are foreigners and
property investors. The CCR market will feel the most
impact from the measures as a significant bulk of
demand is derived from foreigners and investors who
will be most affected by the hefty ABSD rates. Home
prices in the CCR are likely to face some downward
pressure – sellers and developers may dangle
discounts to entice buyers, while opportunistic buyers
may take advantage of the price correction to upgrade
to a property in the CCR.
The Singapore economy is projected to grow by 3% to
5% in 2022, with several headwinds such as impending
interest rate hikes, inflation creeping up as well as
uncertainties over the severity of the new Omicron
coronavirus variant. The initial optimism of reopening
has dampened, as a number of countries battle with a
new wave of cases due to the spread of Omicron. In
Singapore, sales and home prices in 2022 are expected
to be less buoyant than 2021, as a result of the cooling
measures and diminishing supply of new homes in the
outlying areas. Home sales will be largely driven by
demand from resident homebuyers – especially
upgraders and those buying their first home – since
they are least affected by the revisions to the cooling
measures.