Singapore private home prices jumped 10.6% in 2021: URA flash estimates

SINGAPORE: Private home prices in Singapore jumped 10.6 per cent in 2021, quickening from a 2.2 per cent increase the year before, according to flash estimates from the Urban Redevelopment Authority (URA) on Monday (Jan 3).

This was the highest annual growth since 2010, when private home prices rose 17.6 per cent, said Ms Christine Sun, senior vice president of research and analytics at OrangeTee and Tie.

Overall, the private residential property index gained 8.3 points from the third quarter to reach 173.6 points in the fourth quarter of 2021.

"This represents an increase of 5 per cent, compared to the 1.1 per cent increase in the previous quarter," said URA.

This was also the highest quarterly increase since the second quarter of 2010, when prices went up 5.3 per cent, said Ms Sun.

Private non-landed homes in the Rest of Central Region (RCR) drove the increase, with prices rising at a faster rate of 7.3 per cent in the fourth quarter, compared to the 2.6 per cent in the preceding quarter.

Prices of non-landed private homes in the Core Central Region (CCR) rose by 2.5 per cent, reversing a decline of 0.5 per cent in the previous quarter.

In the Outside Central Region (OCR), prices increased by 5.4 per cent in the fourth quarter, compared to the 0.1 per cent decrease in the third quarter.

For the whole of 2021, prices in the CCR, RCR, OCR rose by 3.7 per cent, 16.9 per cent and 8.4 per cent respectively.

Singapore introduced a package of measures on Dec 16 last year, aimed at cooling the property market. They include higher Additional Buyer's Stamp Duty (ABSD) rates and a tighter Total Debt Servicing Ratio (TDSR).

Its impact "may not be felt" in the full-year figures for 2021, said Huttons Asia's senior director of research Lee Sze Teck.

This was partly as the market may have been quieter in the last two weeks of December due to the holidays, and also because first-time home buyers made up about 80 per cent of transactions in the current market.

Mr Lee said fewer launches in 2022 will result in lower new home sales of about 8,000 to 9,000 units, while prices may move up to 3 per cent on the back of higher construction costs.

A combination of fewer homes sold but higher value transactions in the fourth quarter propelled the rise in prices across sales segments, said Ohmyhome research and content analyst Mohan Sandrasegeran.

Demand for new sales may be subdued in the first half of 2022 as developers might reconsider their launch dates and readjust pricing, he said.

He expected overall growth in private home prices to slow down, hovering around 1 to 2 per cent for the first half of the year.

With the property cooling measures, the private property market will become a "genuine home buyer's market", said ERA's key executive officer Eugene Lim.

"It would make sense for motivated sellers to pursue this group with realistic pricing," he added.

Ms Sun said prices of private homes may stabilise and rise at a much slower pace of between 0 and 3 per cent compared to the previous year, after the introduction of the cooling measures.

The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up to mid-December. This is prior to the implementation of the latest round of cooling measures, said URA.

The statistics will be updated on Jan 28 when URA releases its full set of real estate data for the fourth quarter of 2021.

"Past data have shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution," said the authority.