Singapore home prices to increase by up to 7% this year

Analysts revised up pricing outlook as the probability of cooling measures wanes.

Singapore has moved to Phase 2 (heightened alert) from 16 May to 13 Jun, due to a resurgence in community COVID-19 cases, resulting in stringent safe management measures. According to RHB, under the revised guidelines, show flat capacity will be reduced drastically and buyers are limited to groups of two with similar restrictions on resale flat viewings. 

The move has helped cool down some of the frenzy in the residential market, with resale volume falling 11.4% MoM in May based on the latest Singapore Real Estate Exchange (SRX) data.

Similarly, RHB says developers are also seen postponing their new launches, with May and June new sales volume expected to take a hit. The tightened measures however have lowered the near-term risk of additional stringent cooling measures in our view as the Government is likely to adopt a cautious approach amidst current uncertain market conditions. 

“We revise up our pricing outlook for 2021 to 5-7% (from 0-3%) and maintain our full-year new sale volume estimate of 9,000-10,500 units. Key reasons underpinning our revised outlook are reduced probability of cooling measures and resilient job market with falling unemployment levels.”