APPD Market Report Article

Singapore

February 28, 2022

9.3%

SGD 5.08

Rents
Rising

Prime new home sales rise in 4Q21 amid more project launches

  • Three prime projects were launched in the quarter, namely Jervois Mansion (104 units), Cairnhill 16 (14 units) and Perfect Ten (50 units). Prime new home sales rose 34.7% q-o-q to 543 units. Top selling projects in 4Q21 included Jervois Mansion which sold 100 units at a median price of SGD 2,559 per sq ft and The Avenir, where 71 units were sold at a median price SGD 3,226 per sq ft.
  • In the prime resale market, transaction activity was more muted with 593 units sold in 4Q21, compared to 705 units in 3Q21. Total prime sales volume during the quarter was marginally higher q-o-q, and remained indicative of an active market with healthy demand from buyers. In 2021, the prime market performed exceptionally with 4,513 units sold, more than double the 2,180 units sold in 2020.

Project completion delays continue to affect upcoming supply

  • In 4Q21, Royalgreen, a 285-unit residential development, was completed. Other projects initially slated for completion in 4Q21 were delayed to 2022. Vacancy rates fell marginally q-o-q amid healthy take-up during the quarter.
  • New projects from the active land sales market in 2017 and 2018, which are facing construction delays will increase completed supply in 2022 and 2023. Expected economic and labour market recovery could lead to a gradual recovery in the construction sector.

Prime rents continue steady increase in 4Q21

  • Buyer’s confidence and strong interest in prime properties continued to drive capital values of luxury and typical prime properties in 4Q21, posting q-o-q increases of 4.3% and 3.3% respectively. However, short-term demand may be subdued due to the new cooling measures, especially for investors purchasing their second and subsequent homes.
  • In the prime rental market, rents for luxury and typical prime properties continued to rise in 4Q21, registering q-o-q increases of 3.0% and 3.3% respectively. The leasing market is expected to remain healthy, supported by gradual border reopening and improving employment conditions as the economy recovers.

Outlook: Sales to moderate in the short term before recovering

  • The cooling measures implemented with effect from 16 December 2021 will likely dampen sales performance for the next few quarters and moderate demand from buyers before recovering. Some buyers and sellers are expected to step back and adopt a “wait-and-see” approach. Price increases are also expected to moderate as demand softens.
  • Prime rentals are expected to continue rising in line with economic recovery and employment growth. As border restrictions ease, more foreigners coming into the country will contribute to leasing market activity and support growth in the market.

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

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