Read Online: Singapore Property Market Outlook 2022

Singapore property market outlook pmo 2022

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Note: This supplements the PropertyGuru Singapore Property Market Outlook 2022 report that was published on 13 December 2021.

On 15 December 2021, the Government announced new measures to cool the property market, raising the Additional Buyer’s Stamp Duty (ABSD) rates, tightening the Total Debt Servicing Ratio (TDSR), and lowering the Loan-to-Value (LTV) limit for housing loans taken from HDB.

The new policies are not surprising. As referenced in our Singapore Property Market Index Q2 2021 report, we have predicted tighter property curbs in 2021 since the start of the year.

This time, the trigger seems to be the sharp increase in the number of million-dollar HDB transactions. The HDB property market underpins the residential property market in Singapore, which is why the Government has started with reducing the TDSR and lowering the LTV limit for HDB-financed loans.

The impact of these measures is significant. Multiple property buyers are affected by the increase in ABSD rates, especially investors and foreigners. Although first-time Singaporean buyers are exempted from ABSD, they are still subject to the tightened TDSR of 55%. The objective of this is to reduce household mortgage debt. Developers also face a higher remissible ABSD rate of 35%.

In view of the latest property curbs, we expect the residential housing market to slow down significantly, at least as a knee-jerk reaction. Compared to owner-occupiers, investors and foreigners are the most heavily impacted by the new measures. These buyers may opt for overseas and/or commercial property investments instead. The expected recovery in the foreign-buyer market may also be hampered due to the steep ABSD rate hike.

In the report, we also flagged the tapering private housing supply in recent years. However, on 16 December 2021, the Government announced that they will be increasing the supply in the confirmed list of Government Land Sales (GLS) sites in H1 2022 to 2,785 units, up by 39% year-on-year. We still expect fewer than usual new launch projects in 2022, but this news means there could be more private properties to look forward to in 2023 and beyond.

 

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