Singapore private home market to remain on sound footing

Cheryl Chiew25 Aug 2021


8,449 units in the primary and secondary private home market were transacted in Q2 2021, a 4.3% quarter-on-quarter increase.

Barring the introduction of cooling measures from the government, Singapore’s private homes market is expected to remain on sound footing, with new launch activity picking up in the second half of the year, according to Edmund Tie.

This comes as the market continues to be supported by optimistic buyer sentiments and ample liquidity.

In Q2 2021, a total of 8,449 units were transacted in the primary and secondary markets, up 4.3% quarter-on-quarter (QoQ) and a substantial 217.2% year-on-year (YoY) “due to a low base effect arising from the circuit breaker period in Q2 2020”.

Secondary sales accounted for majority of the transactions in Q2 2021 at 5,483 units, or up 19% from the previous quarter.

Sales in the primary market, on the other hand, declined 15.1% from Q1 2021 to 2,966 units as developers postponed or limited new launch activity amid tighter COVID-19 safety measures rolled out by the government in May.

Among the market segments, the Central Core Region (CCR) registered the highest quarterly growths of 19.4% in primary sales and 29.1% in secondary sales.

Edmund Tie attributed the strong growth in primary sales to the sizeable growth in new launches at 46.8% in Q2 2021, “which at 1,019 units was the most out of the market segments”.

“Living in the prime and downtown areas continues to draw home buyers, with projects such as One Bernam and Irwell Hill Residences performing well and contributing to the CCR’s strong primary sales performance for 2Q 2021. There is still appeal in upmarket residential living that offers connectivity and proximity to town,” said Lam Chern Woon, Head of Research and Consulting at Edmund Tie.

The Rest of Central Region (RCR) saw primary sales drop 37.5% QoQ, while secondary sales increased 9.2% QoQ in Q2 2021.

The Outside Central Region (OCR) posted 1.6% and 20.7% QoQ growths in the primary and secondary sales, respectively.

Over at the non-landed primary market, 32.3% of transactions were for units measuring between 500 and 700 sq ft, “suggesting healthy mass market demand for smaller and more affordable units against the backdrop of rising property prices”.

Meanwhile, the proportion of transactions for the smallest unit type of below 500 sq ft declined to 9.4% in Q2 2021 from 12.7% in Q1 2021.

Conversely, an increase in the proportion of transactions was seen for larger units above 1,000 sq ft, accounting for 27.3% of primary sales during the period under review.

Studio apartments appear to have lost some of their appeal despite their lower price quantum, as more home buyers seek larger spaces to accommodate work-from-home arrangements,” said Lam.

In terms of price, the majority of primary transactions were for units priced at $1 million to $1.5 million at 38.2% in Q2 2021, down from 47.6% in Q1 2021.

A similar decline was observed for units priced below $1 million, from 15.6% in Q1 2021 to 5.4% in Q2 2021.

Edmund Tie said the decline was “likely due to rising property prices and the preferential shift away from smaller homes”.

It added that the trend to shift away from smaller units is further reinforced by the hike in the proportion of transactions for units above $2 million, from 21.2% in Q1 2021 to 24.1%, forming almost all primary transactions in Q2 2021.

In Q2 2021, the number of purchases by foreign buyers (non-PR) fell 2.7% to 284 units from 292 units in Q1 2021.

“The decline did not affect the CCR, where the number of transactions increased by a significant 35.8% QoQ in Q2 2021, from 109 units to 148 units,” said Edmund Tie.

The CCR overtook the RCR with the most transactions made by foreign buyers, as foreigners gravitated to a more familiar segment. The Mainland Chinese continued to be the top foreign homebuyer across all regions in Q2 2021.

The property consultancy also revealed that the loss-making share for the overall market declined from 14% in March to a record low of 10.5% in May before rising again to 13.8% in June.

Profitability in the secondary market improved during the first two months of Q2 2021, before home viewing restrictions took effect in mid-May, which affected the profitability of transactions in June.

“As the government continues to ease safety restrictions amidst the rising vaccination rates, owners can look forward to more certainty as they go about their marketing process. Resale profitability could pick up slightly in the coming months, barring the introduction of fresh home viewing restrictions or a deterioration of the economic environment,” said Lam.

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email:


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