Its a new year 2022 but what have we learned in 2021 about the Singapore Property Market? Brace yourself for a cold-hard no holds barred Review!
Several factors have witnessed a tremendous change from the previous year. So, it can be hoped that 2021 will end in a favorable way for Singapore real estate investment.
“As an architect, you design for the present, with an awareness of the past, for a future which is essentially unknown.” These are the words of Famous British Architect Norman Foster and can be linked in context with the property world as well. The Singapore property price trend has changed a lot in 2021. Several factors have played an imminent role in shaping up Singapore landed property price trend. These factors include demand and supply, availability of workforce, economic factors, and finally, the Covid-19 pandemic.
Let’s look at some of the most anticipated Singapore property trends that happened in 2021.
1. The Catch-Up Between Supply and Demand in Real Estate
The prices of private homes have been rising for six consecutive quarters, and these prices witnessed a historic high in the third quarter of 2021. So, a price increase detonates an increase in demand. However, the pandemic, along with limited supply, has also played a role in the hike in prices.
Singapore real estate has witnessed a consistently rising sales cycle. Hence, it comes as no surprise that the unsold private housing inventory has dipped to nearly four years low. Many homeowners are capitalizing on this situation and selling their houses to get a better price on them and move to better localities. The fear of an un-matched price spike is also making several to-be homeowners fasten their seat belts and get a house before the price gets completely out of their range.
2. New Projects Seen in The Singapore Property Price Trend
An interested Singapore landed property price trend is the number of new projects to be launched next year. An expected number of 30 projects could be launched in 2022. These are significantly less than the more than 50 projects launched in 2019. However, it is changing the landscape of Singapore landed property price trend.
Singapore real estate is expected to release 9,000 units, including executive condominiums. The number is around 17 to 20 % lower than the numbers released in the prior two years. So, it can signify that the property market will turn into a seller market, and they will set the price trend. An increase in construction cost and a decrease in new projects signify that Singapore property prices for private homes will increase by 6-9% in 2022.
Hoi Hup Realty and Sunway development collectively bought Flynn Park enbloc in Pasir Panjang for 371 Million Dollars. Flynn Park enbloc was zoned as residential with a plot ratio of 1.4 as per the URA master plan 2019. The Flynn Park enbloc was reserved for a price of $1286 per plot ratio. However, the sales price worked out at $1355 per plot ratio. Sunway Development and Hoi Hup Realty also collectively bought two freehold sites in Thiam Siew Avenue for a massive amount of 815 million dollars.
3. The Increase in Demand for Bigger Homes
Working from home doesn’t seem like a trend that is going away anytime soon. Hence, people are now more interested in investing in homes that meet all their demands. 8 in 10 Singaporeans are interested in hybrid work culture. There has been quite an increase in resale for bigger flats. On the contrary, sales for small resale units haven’t increased as much.
Moreover, buyers aren’t just looking for homes when they start looking. They want to live in a good vicinity that has easy availability of the basic amenities and transport facilities. They’re looking forward to having everything within one space. So, they won’t have to travel far and wide for entertainment or necessity.
4. An Increased Interest and Demand in Landed Properties
The increase in demand and limited supply has led towards an increased interest in landed properties. The increase in price and shortage of big apartments at prime locations has made landed properties a favorite option for many looking for properties in Singapore real estate. People can make amends and easily alter a landed property as their preferred style. Hence, many are moving towards landed properties. The new generation of buyers is set to do things differently. Previously, buyers used to compare land home prices in terms of per square feet. The new generation of buyers compares the property by per square feet of the liveable space.
5. An Increase In Rental Demand For 2022
Obstruction in inbound travel may have impacted the Singapore property price trend for 2021. The ongoing pandemic made it necessary to put travel restrictions. However, the rental market can see an increase in rents with the restoration of air travel from various countries. Foreign ex-pats, business partners, and students will return and will need accommodation. Additionally, the return of the stranded Malaysian workers will also see a spike in rental prices.
6. A Surge In Collective Sales By The Singapore Real Estate Investors
The pandemic impacted the sales of real estate heavily in Singapore. It impacted many countries in a similar pattern. However, the tide is changing as many real estate investors are entering into a collective sales agreement to stock up their land bank. The Flynn Park is a successful example of such joint investments.
7. 2022 Will Welcome A Stable Luxury Real Estate
According to CNA, the Singapore real estate market recorded 7.5 Billion in transactions for luxury property in the first half of 2021. More and more people are selling their properties for higher prices and are moving to bigger and better accommodations.
Additionally, some luxury launches are expected to grab the attention of buyers in the upcoming year. There are new projects at the Maxwell House enbloc and Marina View that will be launched in the second half of 2022. Downtown Core will also see an increase in interest as it will become the top hot spot for luxury houses in Singapore. Private residential development along with commercial development at Lentor Central will also see a good response from the buyers. There are new condominiums and execute condominiums bought by city developments and in a joint venture with MCL land that will grab the interest of the buyer and will be ready by next year.
8. The Positive And Negative Impact Of The Cooling Measures In The Singapore Property Prices Trend
Singapore decided to go ahead with the cooling measures despite being in the middle of the pandemic. The cooling measures are having an impact on Singapore property prices. The cooling measures will have no negative impact on first-time house buyers and those holding PR and looking to buy properties. The cooling measures can play a role in ensuring the prices will not spike out of order.
The investor appetite can shrink in the Singapore real estate market. Specifically in the luxury and high-end homes market. Higher additional buyer stamp duty (ABSD) would be applied to investors, foreign buyers, and those buying second and third houses as investments. Foreign buyers will face a 30% ABSD hike, which can hinder their investment volume in Singapore real estate. So, the cooling measures will also lower the risk of an unending cycle of an increase in home prices.
9. The Decrease In Demand For Central Locations
It has been drilled into the mind of buyers to look for houses in the central locations. However, that will no longer be the case as the pandemic has changed this significant factor. The Hybrid working and work from the home environment has made it rather unnecessary to have a home in a prime location. The ease in travel requirements to the office means more and more people are opting for locations other than the prime ones.
So, people aren’t willing to pay premium prices for prime locations with work from home as an existing option for the long run. Hence, we can expect an increase in price for condominiums and executive condominiums in the outside central region of Singapore.
10. An Unprecedented Increase In Demand For Homes That Are Designed Creatively
The pandemic has changed many things, some for the better and some for the worse. It has quite a wide impact on the Singapore real estate market. On one end, it made people’s preference move away from looking for homes at central locations. However, on the other hand, it has shed light on the importance of the house and the multi-level purpose it can serve.
People are no longer interested in buying a property that doesn’t fit their demands. The longer hours of stay at home have made it vital to look for houses with creative designs. Work from home means that the same place must serve both purposes of work and fun.
All in all, the Singapore property market is expected to see some interesting developments like the cashew heights. Interesting developments would also be seen at Pandan Valley – a freehold development completed in 1978. There would be an increase in people looking for a house for rent in Singapore with relaxation in border and travel restrictions.
Although, the cooling measures will also make it easy for first-time buyers to buy their first house, the fundamental reasons for rising prices is: A LACK OF SUPPLY, which will continue on for a couple more years.
The results for 2022 is really……
