Singapore's private home prices rise by 3.5% in Q2, five times the increase in previous quarter

SINGAPORE: Prices of private homes in Singapore rose at a quicker pace of 3.5 per cent in the second quarter of this year, five times the 0.7 per cent increase in the previous quarter.

The private residential property price index increased to 180.9 in the second quarter, up from 174.8 in the preceding three months, according to real estate statistics released by the Urban Redevelopment Authority (URA) on Friday (Jul 22).

Prices of non-landed properties increased by 3.6 per cent in the second quarter, compared to the 0.3 per cent decrease in the first quarter.

Such properties in the core central region rose by 1.9 per cent, while those in the rest of the central region went up by 6.4 per cent. Prices of non-landed homes outside the central region increased by 2.1 per cent in the second quarter.

Landed home prices increased by 2.9 per cent in the second quarter of this year, compared to the 4.2 per cent increase in the first three months of 2022.

Resale transactions accounted for about 62.2 per cent of all sale transactions in the second quarter. There were 4,236 resale transactions in the last quarter, compared to 3,377 units in the preceding three months.

OrangeTee & Tie’s senior vice president of research and analytics Christine Sun said buying sentiment picked up after most COVID-19 safe management measures were eased. On Apr 26, Singapore eased most of its COVID-19 measures, including group size limits.

Ms Sun said show flat and house viewings rose substantially, “significantly boosting the sector”.

“The private residential market saw a rebound as many developers ramped up launches and more buyers streamed back to the market last quarter,” she added.

She added that the number of non-landed homes excluding executive condominiums (ECs) bought by foreigners and non permanent residents rose from 144 units in the first quarter to 292 units in the second quarter.

“Given the geopolitical and economic uncertainties in other Asian countries, Singapore has emerged as their top investment destination. We are one of the earliest nations to transit smoothly into endemic living, which has boosted foreign investors' confidence," she said.

RENTALS

Rentals of private homes increased by 6.7 per cent in the second quarter, compared with the 4.2 per cent rise in the previous quarter.

Rentals of non-landed properties in the core central region increased by 7.7 per cent in the second quarter, while those in the rest of the central region rose by 5.9 per cent.

Rentals of non-landed properties outside the central region increased by 7.7 per cent.

Rentals of landed properties increased by 3.2 per cent in the second quarter, slower than the 5.3 per cent rise in the previous quarter.

Ms Sun added that more tenants are signing lease periods of at least two years to lock in the current rental rate, as they anticipate that rents will rise further in the coming months.

Mr Lee Sze Teck, senior director of research at Huttons Asia, said landlords are raising rents to cover the increase in interest costs.

SUPPLY

Developers launched 1,956 uncompleted private residential units, excluding ECs, for sale in the second quarter, up from 613 units in the preceding quarter.

A total of 2,397 private homes, excluding ECs, were sold in the second quarter, up from 1,825 in the first three months of this year.

In total, about 30,700 units including ECs are expected to be completed in 2022 and 2023, said URA. This is nearly three times the 10,400 units completed in 2020 and 2021. 

"This will help to cater to housing needs in the immediate term. More supply with planning approval, totalling 27,000 units as of the second quarter of 2022, will be completed beyond 2023," the authority added.

In total, about 25,500 units could be made available for sale later this year or next year, said URA. 

"The Government has significantly increased the supply of private housing on the confirmed list for the GLS (Government Land Sales) programmes in 2022 to cater to the strong housing demand, and will continue to monitor economic and property market conditions closely and calibrate housing supply to keep the property market stable and sustainable," it added.

OUTLOOK

Ms Sun said macroeconomic influences, such as global inflation, interest rate hikes, supply chain disruptions and lockdowns in China, may play a more central role in determining housing demand and property prices in the second half of the year.

Mortgage rates are rising in Singapore after the US Federal Reserve increased its rates to tame inflation.

Mr Lee said interest in some upcoming launches in the third quarter should garner interest. These include new homes in Ang Mo Kio, Kovan and Lentor.

The new projects will drive price gains in the third quarter, and there will still be strong demand from Housing and Development Board (HDB) upgraders, he added.

He said private home prices are expected to increase up to 8 per cent this year.

“Amid global headwinds, Singapore's robust economic growth and consistently high employment rate may help cushion homeowners from the impact of the global economic uncertainties,” said Ms Sun.

“Moreover, investors flocking to traditional save havens to preserve their capital may still park their money here as our property investment market is considered one of the safest and most stable in the world.”

She said prices of new homes excluding ECs may rise by 6 per cent to 8 per cent this year.