2021 has been a prosperous year for the Singapore property market, which has displayed incredible resilience in the face of the COVID-19 pandemic.
Despite safe management measures that seemed ever-changing, dependent on the number of the COVID-19 cases in the community, Singaporeans have shown that they are more adaptable than ever and have not let this get in the way of their property plans.
In the PropertyGuru Singapore Property Market Outlook 2022 (PMO 2022), we reflect on the year gone by, pulling together key data and expert insights to predict what we can look forward to in 2022.
Read the full report online or download a copy for later.
Want a quick snapshot of the PropertyGuru Singapore Property Market Outlook 2022? Here’s a handy overview of our key findings and insights.
Contents
- Looking back at 2021
- What to expect in 2022
- New projects in 2022
- Conclusion: Is 2022 the year when things go ‘back to normal’?
Looking Back at 2021
Property prices and transactions rose for six consecutive quarters, overcoming all adversities and bucking all trends. Even during traditional lull seasons, such as the Lunar Seventh Month in August and September, the market continued to boom.
With most borders remaining shut until the second half of the year, property activity in 2021 was primarily driven by local buyers.
Over 25,000 HDB flats reached their Minimum Occupation Period in 2021, resulting in a large group of HDB upgraders fuelling demand for larger HDB resale flats and entry-level condos. The luxury segment also saw a revival as many record-breaking transactions made headlines throughout the year. Many Good Class Bungalows changed hands too.
However, despite climbing prices, the Government announced in June 2021 that the market was not “overheated” yet, quelling rumours. In October 2021, the Government introduced a new Prime Location Housing (PLH) model to manage the prices of future HDB flats in prime locations.
What to Expect in 2022
Prices have risen each quarter since the Circuit Breaker in Q2 2020, and although the pace of growth is slowing down, we expect property prices to continue rising for most of 2022.
With another estimated 31,000 HDB flats coming off their MOP in 2022, the impact of HDB upgraders is likely to continue. Additionally, foreign investors will come back into the market if Singapore continues to reopen its borders via Vaccinated Travel Lanes (VTLs).
In 2022, we are expecting only about 11 new launch projects. This lack of new launches is because the Government has been actively cutting back on the land supply over the past few years. With the GLS pipeline tapering, there was a slight buzz in the collective sales scene this year.
As of Q3 2021, about 25 new en bloc sites were put up for tender, compared to only 11 last year. How many are eventually sold remains to be seen. This will determine the supply for the next few years.
In response to the COVID-19 pandemic, the U.S. Federal Reserve slashed interest rates to near-zero in early 2020. Global interest rates and local mortgage rates recovered slightly in 2021, but have mostly remained low. Access to affordable credit has contributed to the recent property buying frenzy, as it is much cheaper to take up a home loan now than it has been in years.
Recently, the U.S. Fed announced that they intend to raise interest rates at least twice in 2022. While a sudden spike is unlikely, this will inevitably result in a gradual increase in Singapore mortgage rates.
Finally, there is chatter around introducing wealth tax to address the growing wealth disparity in Singapore.
The Government has said that they agree to wealth tax in principle, but it is “not so easy to implement”. The current challenge is how to impose the tax over a range of assets – which will likely include property – and how to drive it equitably.
New Projects in 2022
Conclusion: Is 2022 the Year When Things Go ‘Back to Normal’?
We will probably still grapple with safe management measures in our daily lives in 2022. However, given how well the majority has adapted this year, it likely won’t matter to the property market, which is expected to continue thriving.
For more in-depth analysis on the above, read the full Singapore Property Market Outlook 2022:
Or, read past years’ Property Market Outlook Reports:
Guide
Singapore Property Market Outlook 2021
Guide
Singapore Property Market Outlook 2020
Guide
Singapore Property Market Outlook 2019
