Singapore non-landed home prices up 3.3% in Q2

Sales volume surged 25.9% to 5,844 units in the same quarter.

Singapore’s private residential market has strongly recovered from the lull in the previous quarter. 

According to data from Knight Frank, prices of non-landed private homes (excluding Executive Condominiums (ECs)) turned around and rose by 3.3% q-o-q in Q2 2022** from the 0.3% dip in Q1 2022 when price growth was repressed. 

Here’s more from Knight Frank:

More than three months after the imposition of the December 2021 cooling measures, the total volume of non-landed private homes (excluding ECs) sold already witnessed a 25.9% q-o-q pick-up, with 5,844 units transacted in Q2 2022*. This was attributed to the primary market where the pace of pickup was due to multiple headline new launches. 

Non-landed primary sales notably rebounded by 43.1% q -o-q in Q2 2022* with 2,383 units sold, a recovery from the 42.6% q-o-q plunge in Q1 2022 sales. In contrast to only a couple of smaller-scale new launches (totalling 48 units) last quarter, at least four new developments (excluding North Gaia EC with 616 units) totalling 760 units were launched and readily absorbed in the market in Q2 2022. 

Unabated intrinsic demand from buyers seeking ready-to-move-in units also boosted resale transaction volumes in Q2 2022, which exceeded primary sale volumes by some 45.2%. A total of 3,461 resale units were sold in Q2 2022*, a 16.3% q-o-q increase after two consecutive quarters of decline.

Core Central Region

Prices of non-landed homes in the CCR increased 1.6%** q-o-q in Q2 2022, a reversal from the 0.1% decline in Q1 2022. The price increase coincides with the opening of air travel lanes from April onwards, allowing High-Net-Worth-Individuals (HNWIs) seeking private home investment opportunities in safe havens to buy properties in Singapore. 

The total non-landed transactions in the CCR expanded by 49.5% q-o-q in Q2 2022*, as both primary and secondary sale volumes improved. Despite a lack of new launches, primary sale transactions in the CCR increased by 73.8% q-o-q to 596 in Q2 2022. Almost half of the existing launches managed to move more units in Q2 2022. Irwell Hill Residences, Perfect Ten and Hyll on Holland each sold at least four times the number of units in Q2 2022 compared to the previous quarter. 

The beginnings of an uptick in foreign homebuying have also surfaced in the CCR, with 141 CCR units bought by foreigners in Q2 2022 compared to 70 in Q1 2022. 

Rest of Central Region

New launches in the RCR captured homebuyer attention and stimulated public interest, with the price index rebounding by 6.0%** q-o-q in Q2 2022, a reversal from the 2.7% drop last quarter. 

After a 36.0% q-o-q fall in overall transaction volumes last quarter when developers held back on launches, new launches in the RCR broke the private home market out of its state of pause wrought from the aftermath of the cooling measures. Primary sales transactions saw a 60.7% q-o-q increase in Q2 2022, with 1,305 new sale units sold*. 

New launch projects Piccadilly Grand and LIV@MB accounted for some 42.6% of the total new sale units transacted. Projects in the RCR with compelling selling points are expected to reach new benchmark prices. Average new sale prices this quarter increased by 8.5% q-o-q to S$2,305 psf. 

Outside Central Region

Non-landed homes in the OCR continued to record price increases, albeit at a more restrained 1.7%** q-o-q in Q2 2022. 

The OCR recorded a slight overall increase in sales in Q2 2022, with newly launched projects in the RCR dominating buyers’ attention. A total of 482 new sale and 1,774 resale units were sold in the quarter*, a 5.5% q-o-q decline and 5.7% q-o-q increase respectively. Baywind Residences, which launched in the quarter, sold ten units (41.7% of the project) at S$2,044 on average, reportedly to all Singaporean buyers. 

Islandwide rental contracts of non-landed private homes totalled 12,893 in April and May 2022, about 9.6% lower than the same period last year. Despite the dip in rental volumes, rents have increased between 6% to 16% q-o-q across the various market segments with competition remaining fierce among lessees. Companies who have not adjusted their accommodation budgets accordingly for expatriates might face challenges settling in employees. 

Rental demand will continue to flow in from multiple target sources, vying for the same piece of the leasing pie. Expatriates from Hong Kong who secured professional opportunities in Singapore are expected to be a key source of rental demand, with many renting homes while waiting for permanent residency status or citizenship, while time will be needed for projects affected by construction delays to complete.

Market Outlook

While the cooling measures muted residential market activity in Q1 2022, the sheer weight of demand is outpacing the backlog of supply as Singapore normalises from the pandemic years. Nevertheless, activity could taper in the coming months with rising interest rates acting as a natural cooling measure in H2 2022, reining in homebuyer affordability. 

Overall, private residential prices are now projected to increase around 5% to 7% for the whole of 2022, against the initial conservative forecast of 1% to 3% growth when the cooling measures were first announced in December 2021. Buyers have shown an unanticipated resilience, the kind that will now embolden developers to launch projects to tap on this buyer demand before interest rates rise further. Notwithstanding the Additional Buyer’s Stamp Duty (ABSD) for foreigners, interest in Singapore homes in a flight to safety will also gain momentum with increasingly open borders.

* based on data available as at 12 July 2022. Figures exclude Executive Condominiums (ECs). 
** based on flash estimates announced on 1 July 2022.