Private home prices see sharp slowdown in growth, up 0.4% in 1Q2022: URA flash estimates

By Nadine Yong

/ EdgeProp Singapore |

April 1, 2022 5:30 PM SGT

Private residential property prices grew by 0.4% in 1Q2022, down from 5% recorded the previous quarter (Photo: Samuel Isaac Chua/EdgeProp Singapore)

SINGAPORE (EDGEPROP) - Private residential property prices grew by a marginal 0.4% in 1Q2022, a sharp slowdown from the 5% growth recorded the previous quarter, according to flash estimates released by the Urban Redevelopment Authority (URA) on April1. The lower growth comes off the back of the property cooling measures that kicked in last December.

“The cooling measures which took effect from Dec 16 appear to be harder hitting than expected, significantly impacting the market segments that are more investment driven,” says Ong Teck Hui, senior director of research and consultancy at JLL.

Prices of non-landed private homes declined 0.6% q-o-q in 1Q2022, underpinned by the Core Central Region (CCR) and Rest of Central Region (RCR) which decreased by 0.5% and 3.0% respectively, reversing from 2.7% and 5.7% increases the previous quarter.

Prices in the Outside Central Region (OCR) increased, but at a slower pace of 1.9%, compared to the 5.7% surge in the previous quarter. This segment was supported mainly by demand from local homebuyers. “Non-landed OCR homes remain the most affordable in the private residential market and therefore within reach of many buyers, especially HDB upgraders,” says Ong. (Find HDB flats for rent or sale with our Singapore HDB directory)

Apart from cooling measures, other factors behind the sluggish price growth in 1Q2022 include a dearth of new project launches and diminishing inventory of unsold suburban new homes, adds PropNex Realty CEO Ismail Gafoor. Only about 700 to 1,000 units were launched in 1Q2022 as compared to 3,716 units in 1Q2021, URA data showed.

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In addition, the rise of Covid-19 community cases brought by the Omicron variant had also impacted home viewings, which dampened the private resale market. Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, attributes the slowdown to prevailing global uncertainties. “Some investors may have taken a temporary backseat to assess the likely outcome of these challenges and review their investment strategies,” she adds.

Meanwhile, the landed segment continued to show strong growth, increasing 4% q-o-q in 1Q2022, up from 3.9% the previous quarter and marking the highest quarterly increase since 1Q2021 when landed prices rose by 6.7%. The segment was supported by the resale market and the launch of strata-landed project Belgravia Ace in January.

“The continued uptrend in landed prices could be attributed to resilient owner occupier demand and sellers staying firm with their asking prices due to the limited supply of landed houses and stable economic conditions,” says Wong Xian Yang, Singapore research head at Cushman & Wakefield.

Looking ahead, consultants anticipate the private housing market to remain relatively subdued in the coming months. Tricia Song, CBRE head of research for Southeast Asia, believes buyers will hold back on their purchases to reassess and understand the impact of the cooling measures. “Sales volumes could pick up substantially, however, on the back of attractive new launches in specific months,” she adds.

But expect prices to trend sideways with some downside risks, cautions Ong Teck Hui, senior director of research and consultancy at JLL. He anticipates headwinds for the market arising from rising interest rates and geopolitical uncertainty. “The latter will lead to rising costs, which could moderate economic growth, employment and wages and may affect sentiments in the residential market.”

Meanwhile, PropNex’s Gafoor takes a more optimistic view, anticipating the private housing market to remain “fairly resilient”, supported by HDB upgraders and local buyers, as well as limited unsold stock. The relaxation of community safe management measures and easing of travel restrictions will bode well for the property market, he adds. He is projecting private property prices to grow between 3% to 5% in 2022.

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