APPD Market Report Article

Singapore

December 1, 2021

5.0%

SGD 4.94

Rents
Rising

New sales decline in 3Q21 but overall demand remains healthy

  • Only one new project, Klimt Cairnhill, was launched, contributing to new home sales declining in 3Q21. The project sold one unit at a median price of SGD 3,818 per sq ft. The return to Phase 2 (Heightened Alert) from 22 July to 18 August restricted flat viewings, as the permissible group sizes were reduced from five to two pax. Resale transaction volume in 3Q21 was slightly lower than in 2Q21.
  • 407 new prime homes were sold in 3Q21, compared to 681 in 2Q21. The top seller was Leedon Green which sold 86 units at a median price of SGD 2,642 per sq ft. Les Maisons Nassim achieved the highest price in the prime market during the quarter, fetching SGD 5,786 per sq ft for one unit sold.

New project completions continue to face delays

  • There were no major completions in the prime districts in 3Q21. Vacancy rates eased slightly, as units were being taken up in the absence of new supply. Improved economic and employment conditions continue to benefit the leasing market.
  • The supply of completed units is expected to increase in 2022 and 2023 as many sites acquired between 2017 and 2018 could be developed by then. The COVID-19 outbreak continues to affect construction progress, resulting in delayed completions for a number of projects.

Prime rents continue trending upwards in 3Q21

  • Capital values of luxury and typical prime properties continued to rise in 3Q21, posting q-o-q increases of 1.9% and 2.0%, respectively, in 3Q21, as market sentiment remained positive. Given that the market is on an uptrend, demand is likely to be healthy as buyers continue their house hunts.
  • Rentals of both luxury and typical prime properties continued to rise at a moderate pace in 3Q21. In July, the unemployment rate rose 0.1% from the previous month, likely attributed to the temporary easing of manpower demand in some sectors during the Phase 2 (Heightened Alert) from 16 May to 13 June. Nevertheless, the leasing market remained healthy.

Outlook: Sales market expected to remain healthy

  • As Singapore gradually transitions to “endemic” status, market confidence is expected to remain positive and sales volumes are likely to remain healthy with prices continuing to rise.
  • Prime rentals are expected to continue rising as the economy continues its recovery. The gradual reopening of borders could result in more foreign professionals arriving, which could augur well for the residential leasing market.

Note: Singapore Residential refers to Singapore's overall prime and luxury residential markets.

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