Demand for private homes remain strong in Q3

Cheryl ChiewOctober 13, 2021

Singapore condo

Despite fewer projects launched in Q3 2021, there were 3,358 new sale transactions, up from 2,838 in Q2 2021.

Singapore saw no significant drop in demand for private homes during the third quarter of 2021, even as the city-state reverted to Phase 2 (Heightened Alert) from 22 July to 18 August, and August being traditionally a quiet month due to the Hungry Ghost Festival, said Knight Frank.

It noted that the opening of more travel lanes once COVID-19 cases stabilise “will also release pent-up international demand, especially for the Core Central Region (CCR)”.

With this, Knight Frank expects private home prices to increase by about 7% to 9% for the whole of 2021.

Flash estimates from the Urban Redevelopment Authority (URA) showed that prices for non-landed private homes, excluding executive condominiums (ECs), marginally increased 0.5% quarter-on-quarter in Q3 2021, with transactions within the Rest of Central Region (RCR) being the main contributor to the hike.

The quarterly increase in prices was lower compared to the 2.5% and 1.1% growth registered in Q1 and Q2 2021, respectively.

In Q3 2021, a total of 7,103 non-landed private homes, excluding ECs, were sold, a slight 1.4% drop from the previous quarter.

“While both Q2 and Q3 2021 included periods where Singapore was in or reverted to Phase 2 (Heightened Alert), quarterly sales volume largely held up above a respectable 7,000 units. Especially when compared to an average of about 4,162 units during the pre-pandemic year of 2019,” said Knight Frank.

And while fewer projects were launched in Q3 2021, the number of new sale transactions increased to 3,358 from 2,838 in the previous quarter.

Non-landed secondary sales accounted for around 52.7% of the total transactions in Q3 2021, surpassing the 3,745 transactions in the primary market.

“With rising new sale prices and construction delays, a portion of buyer demand funnelled to the resale market,” said Knight Frank.

The CCR, where only one project was launched in Q3 2021, saw non-landed primary sales volume drop 48.2% to 411 transactions, while secondary sales volume declined 19.2% to 709 transactions.

“New sale units commanded an average premium of 35.7% over resale units in the first three quarters of 2021, and the decline in primary sales possibly led to the 0.6% quarter-on-quarter dip in CCR prices in Q3 2021 after increasing 1.6% in H1 2021,” noted Knight Frank.

Prices in the Outside Central Region (OCR) also declined 0.2% in Q3 2021, while non-landed sales volume increased 22.9% to 3,928 units.

The RCR emerged as the only segment to record a price increase during the period under review, with prices climbing 2.2% quarter-on-quarter.

This marked the fifth consecutive quarterly increase since prices dropped in Q2 2020, said Knight Frank.

However, non-landed sales volume in the RCR dipped 11.9% to 2,055 units. Of these, 980 were new sales while 1,075 were secondary sales.

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg

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