Private sector drags down Singapore Q1 residential investment sales

Sales value declined 9.1% to S$3.11b in the first quarter of 2022.

The investment sales value for Singapore’s residential property sector declined for a second consecutive quarter by 9.1% to S$3.11 billion in Q1/2022 and this was mainly due to the drop in activity in the private sector. 

Savills reveals private investment sales fell 61.1% QoQ from S$2.94 billion in Q4/2021 to S$1.14 billion in Q1/2022, the lowest since Q3/2020 when private investment sales amounted to S$982.1 million. 

Here’s more from Savills:

In the private sector, four sites, which included three collective sales, were sold and the price quantum of each site was relatively low with each below S$100 million. In contrast, five residential sites were transacted in Q4/2021 and of those, three sites were each sold for over S$100 million, the highest being S$815.0 million. 

The largest private land parcel transacted in the quarter was Gloria Mansion at Pasir Panjang Road which was sold for S$70.3 million. While this site was transacted above its reserve price, the two other collective sales in the quarter were sold at the guide price itself. 

As a result of the recalibration of the cooling measures in December 2021, developers have become more cautious in acquiring larger land parcels with smaller plots of land more favoured for the time being.

Owing to the cooling measures where foreign buyers are more adversely affected by even higher Additional Buyer’s Stamp Duty (ABSD) rates, the sales of individual units that were priced above S$10 million slowed down significantly from S$1.36 billion in Q4/2021 to S$949.7 million in Q1/2022. 

This was the lowest since the S$872.5 million recorded in Q4/2020. Although the transaction volume of both landed and non-landed units declined in the quarter, it was not uniform with non-landed home numbers more than halving from 41 units in Q4/2021 to 14 units in Q1/2022. 

For landed homes, the sales volume also fell, but a lower magnitude of 20.0% QoQ to 36 units. Landed home transactions, in particular Good Class Bungalows (GCBs), were more resilient due to the scarcity of such properties and the ultra-high net worth individuals deem them to be a hedge against inflation. In the quarter, the largest residential transaction of an individual unit was a GCB on Chancery Lane which was acquired by the daughter-in-law of Filipino tycoon Andrew Tan for S$66.06 million, or S$1,937 per sq ft on land area.

On the other hand, investment sales in the public sector via the Government Land Sales (GLS) Programme were much stronger, with investment sales value surging from S$482.5 million in Q4/2021 to S$1.97 billion in Q1/2022. Four residential sites were sold under the GLS Programme in the quarter and price quantums of these sites were significantly higher and record high bid prices were recorded for some of the sites.

In Q4/2021, there were only two residential sites sold under the GLS Programme and the largest site was transacted for S$320.1 million. On the other hand, the largest site sold in Q1/2022 was for the site at Jalan Tembusu for S$768.0 million to CDL. Despite the implementation of the new cooling measures, it was still able to attract eight bidders and the top bid was nearly 7.8% higher than the second highest bid. 

These strong responses for the sites came amid the ongoing geopolitical tensions borne out of the Ukrainian conflict as well as the introduction of the new round of cooling measures. The high bid prices obtained for the land parcels signalled developers’ confidence in the market due to limited new supply of development land in the pipeline.