Press Release

July 01, 2021

Singapore Home Prices Grew At A Slower Pace In Q2 2021 Amid Tighter Covid-19 Measures And Limited New Launches

 01 July 2021, SINGAPORE – The prices of private homes and HDB resale flats continued to climb in Q2 2021 – albeit at a slower pace - according to flash estimate released today. The still healthy sales volumes have helped to support prices during the quarter, amid the tightening of COVID-19 safe management measures in May 2021.

Q2 2021 Private Residential Property Index (Flash Estimate)

The flash estimate from the Urban Redevelopment Authority (URA) showed that overall private home prices rose for the fifth consecutive quarter in Q2 2021, rising by 0.9% QOQ – moderating from the 3.3% growth in Q1 2021. On a year-on-year basis, the overall home prices grew by 7.3% in Q2 2021.

The price increase last quarter was led by the non-landed private homes segment which saw values inch up by 0.9% QOQ. Meanwhile, landed home prices ticked up by 0.8% QOQ, easing from a strong growth of 6.7% in the previous quarter, where record-beating sales of Good Class Bungalows (GCBs) pushed up landed home values.

Within the non-landed homes segment, prices in the Outside Central Region (OCR) booked the steepest QOQ increase among the sub-markets, growing by 1.8%. This is followed by the Core Central Region (CCR) and the Rest of Central Region (RCR) which posted price growths of 0.6% and 0.3% respectively.

With a PPI reading of 163.7 points in Q2 2021, the overall private home prices have reached a new peak. In the first half 2021, private home prices have risen by 4.3%.

Ismail Gafoor, CEO of PropNex:
“Home prices grew at a slower clip of 0.9% in Q2 2021, despite the launch of several higher-end projects within the Central Region during the quarter. We think the tightening of safe management measures in May 2021 – which affected developers’ launch activities and property viewings in the resale market - likely contributed to the more measured price movement.

Looking at the caveats lodged, the resale private homes segment appears to enjoy a marginally higher price growth than the new sales market. The average unit price of private new homes sold (excluding executive condominiums) rose by 1.6% QOQ in Q2 2021, while that of resale properties (ex. ECs) increased by 1.7% QOQ. We believe the price gap between resale properties and new launches, as well as the move-in ready status of resale properties have helped to fuel demand for homes in the secondary market, thereby supporting prices.

Based on URA data and Realis caveats, 2,617 new private homes (ex. ECs) were transacted in Q2 2021, while more than 4,100 resale properties (ex. ECs) were sold during the quarter. Although these sales figures trail those of Q1 2021, we think the transaction volumes in Q2 2021 are still very respectable, in view of the limited launches and tighter safe management measures.

Given that there are no major new launches in the latter part of June 2021, we do not anticipate the final PPI figures (to be released on 23rd July) to vary widely from the flash estimate. We think the moderation in price growth as reflected by the flash estimate and the latest comments by the Monetary Authority of Singapore’s managing director Ravi Menon that the property market is not overheated, may dispel some concerns of new cooling measures being introduced in the near-term.

Going by the flash estimate, private home prices have risen by 4.3% in the first half of 2021. For the entire 2021, we project that overall private home values could grow by 6% to 7%.”

Q2 2021 HDB Resale Price Index (Flash Estimate)

The flash estimate released by the Housing and Development Board (HDB) showed that resale prices of public housing flats rose by 2.8% QOQ in Q2 2021. With an index reading of 146.2 in Q2 2021, the HDB resale price index is now 2.1% below the recent peak in Q2 2013.

Wong Siew Ying, Head of Research and Content, PropNex:
“The delays in the completion of new Build-to-Order flats, limited supply of resale flats, improved market outlook and confidence have helped to drive HDB resale prices higher in recent quarters. While the 2.8% increase achieved in Q2 2021 is a marginal slowdown from the previous quarter’s growth, on a year-on-year basis, the HDB resale price has risen by 10.8% in Q2 2021 - which is the highest YOY growth since Q3 2011.

More than 6,600 resale flats were estimated to have been sold in Q2 2021, based on HDB resale transaction data so far. Q2 2021’s sales volume came in slightly lower than the 7,581 units resold in the previous quarter – due to the tighter safe management measures affecting property viewings in May 2021, and possibly some price resistance setting in.

Our market observations suggest that the strong demand for resale flats will likely continue to support HDB resale prices; we have seen some locations garnering cash-over-valuation of $20,000 to $30,000 or more amid competition for choice units.

In the first half of 2021, HDB resale prices have climbed by about 5.9% and we expect HDB resale values to grow by 9% to 10% for the whole of 2021.

As HDB resale prices continue to trend up, some flat owners may be motivated to sell their flat and recycle the capital to purchase a private home. In addition, an estimated bumper crop of over 25,500 HDB flats are due to exit their 5-year Minimum Occupation Period this year, making them eligible to be sold on the resale market should the owner decide to upgrade to a private property.”

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