After a quiet first quarter, the non-landed private property market seems to have recovered. Despite the increased costs of borrowing, prices and sales volumes have picked up and the new major condo launches in Q2 2022 were well-received.
Prices in the HDB resale market maintained their upward trajectory and made small gains, amidst declining transaction volumes.
The already-thriving private property rental markets are expected to receive an even greater boost in the coming quarter as border controls relax and foreign talents return in droves. But with construction delays in both public and private housing improving, it expected that rental growth will be gradually moderated.
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Get the Guru View: Key Findings of the Singapore Property Market Report Q3 2022
Singapore Property Sale Market Index Q3 2022
In Q2 2022, the Singapore Property Sale Price Index picked up, recording a 3.69% quarter-on-quarter (QoQ) increase, compared to the 1.98% QoQ growth seen from Q4 2021 to Q1 2022.
HDB resale flat prices look set to continue making small increments in the coming quarter, despite the spreading sentiment that the average buyer is becoming more unwilling to match high asking prices.
Aside from the young families unwilling to wait out long BTO completion times fuelling demand and the influx of flats that just fulfilled their Minimum Occupation Period (MOP) entering the resale market, prices remain propped up due to an enduring preference for larger HDB flat types. Buyers going for the dwindling supply of these pricier, bigger flats are mostly private property ‘downgraders’, or HDB upgraders willing to pay high Cash Over Valuation (COV) amounts.
The pace of million-dollar HDB flat transactions this year has surpassed that of 2021. Should this momentum be sustained, we are looking at more than 300 million-dollar flats transacted in 2022.
Meanwhile, the non-landed private property market seems to have rebounded from the effects of the December 2021 property cooling measures. Rising mortgage rates also appear to have little impact on the buying sentiment.
Buyers took well to the major Q2 2022 launch offerings Piccadilly Grand and Liv @ MB, reflecting the pent-up demand for attractive projects with compelling sales attributes, such as having a city fringe location and being within walking distance of MRT stations and amenities. With a lineup of attractive new projects in the upcoming quarter and resilient demand, prices show no signs of abating.
Top Performing Districts and Projects
Based on the number of units transacted, Piccadilly Grand (District 8), Liv @ MB (District 15), and North Gaia (District 27) were the top three best-selling new condo launches in Q2 2022.
The Rest of Central Region (RCR) was the main price driver in Q2 2022, largely due to the success of the new launches in Districts 8 and 15. As more return to the office, buyers may have turned their attention towards RCR properties in anticipation of daily work commutes.
Still, the buying preference for larger homes persists. Buyers continue to look for homes in the Outside Central Region (OCR) where properties hit the sweet spot between size and price point.
It is likely that prices in the OCR will pick up in Q3 2022. Aside from the launch of AMO Residence, other notable upcoming OCR launches include Sceneca Residence, Lentor Modern, and Sky Eden @ Bedok. Tengah Garden Residences EC and Tampines North EC are predicted to perform well too.
The top-performing estates for HDB resale flats by transaction volume features HDB estates that contain the bulk of the newly MOP-ed flats. HDB upgraders who have sold their newly MOP-ed flats continue to go for larger resale HDB flats in more attractive and expensive city-fringe neighbourhoods.
Singapore Property Rental Market Index Q3 2022
The Rental Price Index inched upwards and is now at a 16-quarter high, while the Rental Demand and Supply Indices recorded a QoQ dip.
Median asking prices for HDB rental properties listed on PropertyGuru recorded the first QoQ dip in three years (following the introduction of the PropertyGuru Rental Price Index). While the 0.95% QoQ change is modest, this is perhaps a sign that the HDB rental market is finally slowing down.
More young families are collecting their keys to their BTO flats and exiting the HDB rental market. Still, singles and unmarried couples seeking space and privacy continue to rent. Foreign talents looking for affordable rental options also turn to the HDB rental market, keeping prices buoyant.
When looking at the list of top performing non-landed private property rental projects by transaction volume, a preference towards properties in the RCR and Core Central Region (CCR) was observed. Properties near the Central Business District (CBD) and in areas traditionally favoured by expatriates saw an increased uptake.
In anticipation of these returning expatriates, sharp spikes in asking prices for both non-landed and landed private property rental units on PropertyGuru have been observed. Consequently, these higher asking prices could translate to greater rental price growth in Q3 2022.
Top Performing Districts by Rental Yield
This quarter, OCR districts took four out of five spots on the list of top performing districts by rental yield for private properties. Nevertheless, rental properties across Singapore continue to be in high demand.
Mature HDB estates command the highest rental yield percentages, with Bedok and Geylang tied as the top performing HDB estates by rental yield. Thoug resale and rental prices have risen significantly in these neighbourhoods, many still seek to rent in these HDB estates as they strike a good balance between connectivity, nearby amenities, and cost.
In Q2 2022, the non-landed private property market made a sharp recovery from the latest property cooling measures implemented on 16 December 2021. Prices and demand have stayed resilient and are expected to remain so in Q3 2022, on the back of attractive upcoming new launches.
The robust sales have sparked discussions of new cooling measures being introduced before the year draws to a close.
As property prices and bank interest rates continue to climb, conversations surrounding affordability have begun to pick up.
Rising mortgage rates may not necessarily dampen buying as ‘genuine’ homebuyers seeking to buy an own-stay property will still go ahead with the purchase despite the higher costs of financing. To keep within their budget, buyers may simply right-size their property purchase and go for smaller properties or more affordable properties on lower floors.
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