Singapore property prices are set to keep climbing in 2022, but at a slower pace
Private residential prices could rise between 1% to 3% in 2022, according to Leonard Tay, head of research at real estate agency Knight Frank Singapore.
JLL Singapore expects prices to increase by around 2% to 4% this year, said senior Director of Research and Consultancy, Ong Teck Hui.
That’s still a much slower rate than price increases last year, where private home prices jumped by 10.6% in 2021 compared to a year ago.
Prices of public housing flats on the resale market also popped 12.7% last year, data from the Housing and Development Board showed.
In a bid to cool the red-hot private and public residential property market, Singapore introduced new measures in mid-December. They included higher taxes on second and subsequent property purchases and tighter limits on loans.
The measures may have less impact on Singaporean citizens and permanent residents who are buying a home to live in, agents and analysts said.
Foreign buyers, however, appear to have been deterred by the new rules.
Trisni Djohari, a PropNex real estate agent whose clients mostly come from Indonesia, said she used to receive around 10 to 12 enquiries a month.
But she said she only received one enquiry since the cooling measures were announced in mid-December until the time she spoke to CNBC in late January.
“Most of them state that now they have to think twice [before they] buy property in Singapore,” she said.
Additional buyer’s stamp duty for foreigners was raised to 30% from 20% before. ABSD is a tax that is levied on buyers of Singapore residential properties. It is calculated based on one’s residency status, citizenship and the number of residential properties the person owns in Singapore.
Entities such as property developers also need to pay ABSD when they purchase residential property, which was raised to 35% under the new rules.
JLL’s Ong said the volume of transactions in the private residential market fell 20% in the second half of December after the cooling measures were introduced, compared to the first half of that month.
Market watchers expect the effect of the cooling measures to last around two to three quarters.
“Volumes and prices are expected to show tentativeness in Q1 and perhaps Q2 2022 before underlying fundamentals kick in to re-establish homebuying demand,” Tay of Knight Frank said in an email.
Tight housing market
Lower interest rates, limited supply and strong demand are some factors that have led to the increase in home prices.
The private residential property market was bolstered by buyers working in sectors that benefited from the Covid-19 pandemic such as technology and pharmaceuticals, Tay said. Some people also used profits from the sale of their public housing flats to upgrade to a private unit, he added.
Demand was so strong that prices jumped multiple times in a day during one property launch. According to a local media report, there were six rounds of price increases, and units sold ranged from $1,400 Singapore dollars per square foot to S$2,000 (between $1,042 to $1,490) per square foot.
“Pasir Ris 8 was the iconic one,” said Chantel Neo, a property agent at Huttons, referring to the private condominium in the eastern side of the island, which saw prices climbing during its launch.
She said it was “quite a shock to the market.” A number of potential buyers chose not to bid for a unit because the revised prices were too high, she added. Read More…
