Prices of landed homes in Singapore grow 7.3% in H1

The transactions totalled S$2.9b during the same period.

Data from URA reveal that the Property Price Index (PPI) for landed homes rose a further 2.9% in Q2 2022, bringing the total increase to 7.3% in the first half of 2022. Despite the December cooling measures, the price growth was steeper than the same period last year, when landed home prices rose by 6.3% in H1 2021. 

According to Knight Frank, a total of S$2.9 billion worth of landed homes was transacted in H1 2022, a 46.9% half-yearly decline from the S$5.4 billion recorded in the last six months of 2021. While a substantial decline, this was down from an all-time high last year, when total sale values in H1 2021 and H2 2021 successively broke records amid spectacular deals. 

Here’s more from Knight Frank:

Incongruity between the expectations of buyers and sellers as premiums for landed homes spiked also led to the slower materialisation of sales in 2022. Average unit prices rose by some 14.5% to S$1,668 psf on land over two years since H1 2020, when the pandemic intensified the demand for bigger living spaces.

Within the landed housing market, sales in Good Class Bungalows (GCB) dampened after a similar bumper year in 2021. The GCB market recorded S$343.4 million in sales value in H1 2022, a 55.3% half-yearly decline from H2 2021. A weaker macroeconomic outlook toned down sentiments, with some price resistance starting to set into the market as most sellers remained unwilling to budge on price expectations. 

Nevertheless, select sites with attractive locations and plot sizes continued to transact. A GCB on 34,216 sf of land at 42 Chancery Lane was sold to the daughter-in-law of Filipino tycoon Andrew Tan for S$66.1 million.

Market Outlook

A steady rise in affluence, organic growth of the local wealth population and new citizens are expected to contribute to the pool of buyers for landed homes. To exacerbate limited supply in the market, construction costs has sky-rocketed, and consequently the overall cost and time needed to build landed homes. 

While transaction activity is expected to moderate in the year ahead with a weaker global outlook, it is still clear that the scarcity of landed homes and growing domestic wealth will support demand. As such, housing prices in the landed residential market are expected to increase by around 10% for the whole of 2022.