Press Release

April 22, 2022

Modest Increase In Private Home And HDB Resale Prices In Q1 2022 Paves The Way For More Sustainable Growth Amid Rising Uncertainties

22 April 2022, SINGAPORE – Both private residential and HDB resale flat prices posted slower growth in Q1 2022, as the impact of the new cooling measures – such as hikes in additional buyer’s stamp duty (ABSD) and tighter total debt servicing ratio (TDSR) threshold - implemented in December 2021 dampened sentiment and limited new launches and the seasonal lull reined in sales volumes.

Q1 2022 URA Private Residential Property Index

Overall private home prices climbed for the eighth straight quarter in Q1 2022, inching up by 0.7% QOQ – sharply lower than the 5.0% QOQ growth in the previous quarter. This is the slowest pace of quarterly price increase since Q2 2020 where private home values climbed by 0.3% QOQ. With a PPI index reading of 174.8 in Q1 2022, private home prices have achieved yet another new peak after home values bottomed in Q1 2020.

Source: PropNex Research, URA

Landed homes led the price increase in Q1 2022, rising by 4.2% QOQ as limited stock, healthy demand for Good Class Bungalows (GCBs), and strong take-up of strata-landed units at new launch Belgravia Ace helped to prop up landed home prices during the quarter.

Meanwhile, non-landed private home values dipped by 0.3% QOQ in Q1 2022 – marking the first quarterly price decline for non-landed homes since Q1 2020. Among the three sub-markets, the Rest of Central Region (RCR) saw the steepest price drop during the quarter, with prices falling by 2.7% QOQ. This decline is mainly due to a strong Q4 2021 where new launch Canninghill Piers had boosted home prices. Non-landed private homes in the Core Central Region (CCR) also posted a price decline in Q1 2022 where values slipped by 0.1% QOQ, as the cooling measures weigh on the home buying interest among foreign buyers and investors.

The Outside Central Region (OCR) outperformed the other two sub-markets with a 2.2% QOQ price increase in Q1 2022. The dwindling unsold inventory of new units in the OCR as well as the healthy demand from HDB upgraders continued to support prices in the mass market. As at the end of Q1 2022, the unsold stock of new homes has reached a new low at 14,087 units (excluding Executive Condos) - of these, 3,890 units are located in the OCR.

Developers sold 1,825 new private homes (ex. ECs) in Q1 2022 while 3,377 residential properties were transacted in the resale market. Q1 2022 sales were substantially lower than the 3,018 new homes and 4,748 resale homes transacted in the previous quarter. In the EC segment, 131 new units changed hands in Q1, representing a 49.6% decrease from Q4 2021.

“The slower price growth and pullback in sales volume in Q1 2022 did not come as a surprise, given the fresh property curbs imposed in December 2021. The ABSD hikes on foreign buyers and property investors, in particular, likely held back some demand for new and resale homes. In addition, developers also put out fewer new launches in view of the Lunar New Year festive period – only 613 new units (ex. ECs) were launched in Q1 2022, compared with 2,275 units in Q4 2021. Furthermore, the spike in Covid-19 community cases in February also affected home viewings in the resale market.

We think the modest performance in the private housing market in Q1 is also reflective of the general sentiment, amid the growing uncertainties arising from the Ukraine war and magnified concerns over rising inflation as well as interest rates. With prices climbing at a more measured pace in the first quarter, it also paves the way for a more sustainable overall price growth in 2022. PropNex expects private home prices to increase by between 3% and 5% this year, following the impressive 10.6% growth in 2021.

The robust home sales in 2021 meant that a part of the pent-up demand for new and resale properties could have been satiated to some extent. In addition, there will be fewer major new project launches this year. Therefore, new home sales and resales may likely trend lower in 2022 and would still be largely driven by Singaporean buyers and HDB upgraders. That said, with the easing for Covid-19 rules and travel restrictions, some foreign buyers may return to pick up homes, especially in the CCR. Notwithstanding the ABSD, Singapore remains a highly attractive investment destination for property buyers who are looking for a safe and stable place to park their funds.

We expect market activity to pick up in Q2 2022 as developers launch more projects for sale, including North Gaia EC, Piccadilly Grand, and Liv@MB. For the full year 2022, we project that new home sales could come in at 9,000 to 10,000 units (ex. ECs), while resale volume may reach 15,000 to 16,000 units.”

Q1 2022 HDB Resale Price Index

Data released by the Housing and Development Board (HDB) showed that resale prices of public housing flats rose by 2.4% QOQ in Q1 2022 – this is the slowest quarterly growth since Q3 2020 where resale values climbed by 1.5% QOQ. With an index reading of 159.5 in Q1 2022, the HDB resale price index is now at a new high. In Q1 2022, 6,934 flats were resold, representing a 12.7% QOQ decline from 7,940 flats transacted in Q4 2021.

Source: PropNex Research, HDB

“The decline in HDB resale volume in Q1 2022 was largely due to the slower market activity over the Lunar New Year period and the large number of Covid-19 cases likely disrupting home viewings. We observed that sales rebounded from February to March and feedback from agents indicate that sales enquiries for resale flats remain steady.

By and large, we expect demand for resale flats to be relatively firm through the year, supported by Singaporean first-time home buyers, especially families that prefer move-in ready flats. Recent news about further delays in the completion of at least three Build-to-Order (BTO) projects may also discourage some would-be buyers from purchasing BTO flats and opt for resale flats instead. Hence, the HDB resale market should continue to do well this year. For 2022, we expect HDB resale flat values to rise by 6% to 8% while transaction volume could come in at around 28,000 to 29,000 units.”

For Enquiries

Carolyn Goh

Senior Director, Corporate Communications and Business Development

(65) 6820 8000

Wong Siew Ying

Head of Research and Content

(65) 6820 8000

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