Press Release

July 01, 2022

Singapore Home Prices March On In Q2 2022, Reflecting Healthy End-user Demand

SINGAPORE, 01 July 2022 – Private home prices and HDB resale prices continued to rise in Q2 2022, with both price indices growing at a faster pace compared to the first quarter, according to flash estimates released by the Urban Redevelopment Authority (URA) and the Housing and Development Board (HDB). Private housing and HDB resale flat prices remained underpinned by healthy home-occupier demand from Singaporean buyers.

Q2 2022 Private Residential Property Index (Flash Estimate)

The flash estimate from the Urban Redevelopment Authority (URA) showed that overall private home prices rose for the ninth straight quarter in Q2 2022, growing at a faster clip of 3.2% QOQ – following a 0.7% growth in the previous quarter. The price increase in Q2 2022 was led by the non-landed private home segment, where values rose by 3.3% in Q2 2022 – sharply reversing the 0.3% decline in Q1 2022.

The non-landed private home price growth was driven largely by the Rest of Central Region (RCR) where home values rebounded by 6% QOQ in Q2 2022, reversing the fall of 2.7% in Q1 2022. New launches Piccadilly Grand and Liv @ MB – which were put on the market in May 2022 - helped to prop up prices in this sub-market, with robust sales at average prices of $2,182 psf and $2,409 psf respectively. In addition, several previously launched projects also booked steady sales at firm prices during the quarter; they included Normanton Park, Riviere, Avenue South Residence, One Pearl Bank, Meyer Mansion, and Verticus.

In the Outside Central Region (OCR) sub-market, prices rose by 1.7% QOQ in Q2 2022, slowing from the 2.2% QOQ growth in the previous quarter. The dearth of new launches continued to exert some upward pressure on OCR home prices. Among the top-selling private residential projects in the OCR in Q2 were The Florence Residences, The Watergardens at Canberra, and The Gazania.

In the Core Central Region (CCR), prices of homes grew by a modest 1.6% QOQ in Q2 2022. This comes despite the ample stock of unsold new units in this sub-market and the December 2021 cooling measures – aimed at reining in investment demand - which managed to quell price growth in the Q1 2022. The slight price correction may have wooed some opportunistic buyers to pick up homes in the CCR. Several projects saw improved sales in from Q1 to Q2, including Haus on Handy, Irwell Hill Residences, The Avenir, Hyll on Holland, Perfect Ten, One Holland Village Residences, and One Bernam.

Meanwhile, landed home values rose by a decent 2.9% QoQ in Q2 2022, following the 4.2% increase in the previous quarter. The slower pace of growth came amid more sluggish landed home sales during the quarter as rising interest rates, volatility in stock markets, and concerns over a potential recession likely cooled buying demand.

Based on URA Realis caveats data up till 21 June 2022, developers sold some 2,258 new private homes (ex. ECs) in Q2 2022, while there were over 3,380 resale transactions.

“Private homes sales market performed quite well in Q2 2022, the 3.2% growth posted during the quarter was surprising given the many uncertainties in the market – one where we have had to contend with rising inflation, stock market turmoil, monetary tightening as central banks around the world increase interest rates. This perhaps speaks of the resilience of the housing demand, largely underpinned by Singaporean buyers.

After a slower sales performance in Q1 2022, pent-up demand from limited new launches spurred private home sales in Q2 2022, where fresh projects such as Piccadilly Grand and Liv @ MB were well-received by buyers. We remain cautiously optimistic about new home sales this year as May 2022’s strong performance (1,356 units ex. ECs, +105.5% MoM) will help to lift sentiment. In addition, Singapore remains an attractive and safe investment destination for foreign investors, and the reopening of international borders have seen foreign buyers returning to transact.

The record low unsold stock of new private homes (14,087 ex ECs as at Q1 2022) should also help to drive take-up of new launches. We expect healthy buying interest for upcoming launches in Q3 2022 – including AMO Residence, Lentor Modern, and Sceneca Residence – which will play a part in keeping home values firm in the subsequent quarters.

However, there may be some downside risks to home sales, chief among them is the issue of rising interest rates. As home loan rates climb, it will lead to higher home financing cost. This normalisation of interest rates is something that buyers will have to consider carefully and adjust to after a decade of being in a low interest rate environment. Generally, those with genuine housing needs will still enter the market to transact, especially with more launches to come. We would advise buyers to work out their sums properly, keeping in mind that interest rates may continue to rise this year and into 2023. Some buyers may become more prudent and opt for a property with a more manageable price quantum by reviewing the location and size of the unit.

With interest rates expected to rise further, we anticipate that it could possibly trigger a review of the medium-term “stress-test” interest rate of 3.5% that is currently applied to home loan applications when calculating the total debt servicing ratio. The medium-term interest rate may be revised upwards to the tune of 4.5% to 5%. Should this revision kick in, it could put a drag on home sales as it will likely affect the loan amount that a buyer could borrow based on his/her existing income.

For the whole of 2022, we project that overall private home prices could rise by 5% to 6% - slowing from the 10.6% growth in 2021. Meanwhile, new home sales could range from 8,000 to 9,000 units (ex. ECs).”

Q2 2022 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 2.6% QOQ in Q2 2022 – inching up from the 2.4% increase posted in Q1 2022. Based on transaction data, more than 6,400 HDB resale flats were sold in Q2 2022 – slightly down from the 6,934 flats sold in the previous quarter.

“HDB resale prices continued to climb in Q2 2022, rising by 2.6% QoQ. This is in spite of the slightly lower resale volume in Q2 2022 which could be due to a combination of factors, including the limited resale flat stock, a mismatch in price expectations between buyers and sellers creeping in, as well as buying demand having been met to some extent following the robust sales last year.

It is also possible that the HDB’s Build-to-Order (BTO) exercise in May could have siphoned off some demand from the resale market. May’s BTO exercise featured several projects in attractive locations: in Yishun near the Yishun MRT station; in Jurong West, next to the Jurong Lake District; and in mature towns Toa Payoh, Bukit Merah and Queenstown – the latter two being under the Prime Location Public Housing model.

In 2022, we expect the HDB resale market to continue to perform well, though prices will likely climb at a slower pace of 7% to 9%, as opposed to the 12.7% increase in 2021. Some of the demand drivers of resale flats will include the preference for more spacious homes, desire for a move-in ready flat to avoid any completion delays of new builds, and generally still affordable prices for many Singaporean households – about 68% of HDB resale flats sold in Q2 2022 were priced below $600,000, according to transaction data.”

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