Singapore records strongest home price hike in a decade

Private residential prices increased 5% in Q4 2021.

Flash estimates from the Urban Redevelopment Authority (URA) revealed that Singapore private residential prices recorded a sharp 5% increase in Q4 2021 from the 1.1% increase the previous quarter. JLL says this is the strongest quarterly price increase since Q2 2010.

“Policy makers would have anticipated the substantial price increase in 4Q21, which resembles pre-cooling measures quarterly price trends in 2010. This is likely to have contributed to the decision to tighten cooling measures from 16 December 2021,” said Ong Teck Hui, JLL’s Senior Director of Research & Consultancy.

Here’s more from JLL: 

Keen demand from buyers and optimistic pricing in 4Q21, contributed to robust price increases across all market segments. Leading the way was Rest of Central Region (RCR), which saw a huge jump of 7.3% in non-landed home prices, the highest quarterly price rise in this segment since 1Q10 when the RCR non-landed index rose 7.8%. A major contributor to the robust price increase was the launch of Canninghill Piers in November, which sold 582 units at a high median price of $2,886 psf 

Non-landed home prices in Outside Central Region (OCR) recorded a robust 5.4% rise in 4Q21, as affordable prices in this market segment attracted buyers, including many HDB upgraders. HDB upgraders have benefitted from a buoyant HDB resale market which saw resale flat prices strengthen 12.5% in 2021, based on flash estimates. Prices of non-landed homes in OCR in 4Q21 were led by sales in projects such as The Commodore (164 units at median price of $1,511 psf), Dairy Farm Residences (153 units at median price of $1,657 psf), The Florence Residences (82 units at $1,713 psf) and several others.

In Core Central Region (CCR), non-landed home prices rose a modest 2.5% in 4Q21, reversing a -0.5% decline in the previous quarter. Leading sales in this segment during the quarter, were projects like Jervois Mansion (101 units at median price of $2,553 psf), The Avenir (72 units at median price of $3,229 psf) and Leedon Green (70 units at median price of $2,719 psf).

Landed home prices picked up momentum in 4Q21, rising 3.7%, higher than the 2.6% recorded in 3Q21. As supply of landed homes is limited and demand is growing, sellers have been raising prices to capitalize on the rising market.

For the full year, the overall private residential price index has risen 10.6%, which is the highest annual increase since 2010 when private home prices spiked 17.6%. Aspiration to own or invest in private homes has remained strong, despite cooling measures and pandemic uncertainties, but aided by a low interest rate environment.

In the non-landed home segment, RCR was the top performer in 2021, with prices escalating 16.9%, followed by OCR’s rise of 8.4% and the 3.7% increase in CCR. RCR’s performance may be attributed to much of this submarket being relatively close to the city balanced with prices that are more affordable and competitive, than those in CCR. The landed segment also posted a strong price increase of 13.1% in 2021, as many buyers aspire to own landed homes.

The cooling measures imposed on 16 December 2021 are likely to result in some easing in the market, as many sellers and buyers step back to assess the situation. This is likely to lead to transaction volume moderating in the short-term. Prices are unlikely to decline, because project sales have generally performed well in the last few years and most developers should be able to weather a temporary market slowdown.  

The current unsold inventory is also at a low level, standing at 17,165 units as at 3Q21, having dropped from a high of 37,799 units as at 1Q19. There is therefore less pressure for developers to reduce prices, especially if they are in a healthy financial position. However, price growth of private homes is expected to be moderated due to the cooling measures, rising 2% to 4% in 2022.”