Singapore’s residential market shows positivity with 18% increase in resale

Demand for residential properties has been resilient this year with the resale market dominating H1 2021 

Singapore’s residential market is finally on track to break last year’s figures, as a hopeful recovery during Q1 was interrupted by another round of economic uncertainty via new COVID-19 outbreaks, reported Singapore Business Review.  

Despite tightened measures in Q2, property analysts agree that private sale volumes and prices remained resilient.  

According to OrangeTee, the overall price index for private residential properties rose by 0.8 percent in Q2 2021, the fifth quarterly increase in a row. However, this is a lower rate compared to the 3.3 percent growth last year.  

Senior Vice President of Research & Analytics at OrangeTee Christine Sun said, “Demand for residential properties has been resilient this year despite the heightened alert measures. A total of 16,549 private homes (excluding executive condominiums) have been sold. The full-year sales for 2021 are poised to surpass the 20,909 inked in 2020.” 

The price increase in Q2 is attributed to non-landed homes in Outside Central Region (OCR) which increased by 1.9 percent quarter-on-quarter.  

Yet, the price increment was less significant for the Core Central Region (CCR) at 1.1 percent and 0.1 percent in the Rest of Central Region (RCR). 

 In regards to comparing the new sale and resale markets, the resale market dominated most of the first half of 2021.  

Sun mentioned that new home sales decreased 15.1 percent from 3,493 units in Q1 2021 to 2,966 units in Q2. On the other hand, the number of resale transactions increased by 18 percent quarter-on-quarter from 4,519 units in Q1 to 5,333 units in Q2.  

“This is the highest quarterly resale volume since Q3 2009 (5,809 units). More buyers have turned to the resale market as there are fewer new launches in the suburban region,” Sun added. 

CBRE Southeast Asia’s Head of Research Tricia Song said the gap between the two markets may have been because of the decaying lease of older projects, age, and the depreciation of facilities, older buildings, and designs.  

“Older projects may also tend to be larger in floor plan, and less efficient in today’s context, hence commanding a lower price per square foot,” Song said.  

PropertyGuru Singapore’s country manager, Dr. Tan Tee Khoon, added the resale or secondary market transactions formed close to 60 percent of total private residential sales and that developers’ new launches slowed down due to Phase 2 Heightened Alert. 

“This indicates that some homeowners in Singapore may be in urgent need of accommodation, and resale properties would work better for them,” he said. 

Moreover, luxury home sales managed to achieve 11-year sales high. OrangeTee credited the high sales to a few luxury projects being launched in the CCR in Q2, namely Irwell Hill Residences, One Bernam, and Park Nova.  

An emerging trend among prime landed and non-landed residential properties is the demand for larger spaces. Knight Frank’s data indicated that people are seeking places that accommodate both living and working,  

Furthermore, analysts agree that with the exception of unforeseen circumstances, the market will likely recover by the end of 2021.  

More: Singapore’s public housing prices hit record-high after growing 2.7% in Q3

“With YTD tally at over 80 percent of 2020’s full-year take-up, we expect 2021 new developer sales to come in at around 11,000 units, exceeding 2020’s 9,982 units. With prices up 4.1 percent year-to-June, CBRE Research expects private home prices to rise by six percent to eight percent for the full year, barring any unforeseen circumstances,” CBRE’s Song said. 

Meanwhile, PropertyGuru Singapore’s Tan observed that “Given that mortgage rates are likely to remain affordable in 2021 given its close correlation to federal reserve rates where interest rates are expected to be kept near zero, at least until 2023, both property demand and supply will remain positive driven by genuine buyers and HDB upgraders. Further, the government has shared on 30 June 2021, during a media briefing on the Monetary Authority of Singapore (MAS) Annual Report, that they “do not think the market is overheated right now” and thus unlikely any property curbs this year.”