25th January to 31st January 2022
Despite the fast-growing prices, sales of new private homes and resale properties increased in 2021. The HDB resale market also saw transaction volumes increase 25.3% last year, while prices rose 12.7%, marking its highest annual growth since 2010.
1) Sales for new private homes, resale properties up in 2021
Singapore saw sales for new private homes and resale properties increase last year even as prices hit new records, reported Channel News Asia, citing data from the Urban Redevelopment Authority.
Developers sold 13,027 private homes in 2021, up from the 9,982 units shifted in 2020. The number of resale homes sold also jumped to 19,962 units in 2021, from 10,729 units in the previous year.
OrangeTee & Tie’s Senior Vice President of Research and Analytics Christine Sun said last year’s resale transactions were the highest since 2007 when 20,980 units were sold. She noted that the fast-growing prices did not hamper demand, with sales brisk across many project launches as well as resale developments last year.
Overall prices of private homes rose 10.6% for the whole of 2021, up from the 2.2% hike registered in the previous year. Sun said it was the highest annual growth since the 17.6% increase posted in 2010.
In 2021, more than 20,000 HDB flats fulfilled their 5-year Minimum Occupation Period (MOP). Demand for new condos and ECs, especially entry-level projects located in the Outside Central Region (OCR), was likely fuelled by HDB upgraders. In 2022, more than 31,000 HDB flats will fulfil their MOP and we can expect fewer new launch condos and EC projects; demand is likely to persist.
2) HDB resale prices rose 12.7% in 2021
Prices of resale Housing and Development Board (HDB) flats rose 12.7% in 2021, the highest annual growth since 2010, reported Channel News Asia citing HDB data.
On a quarterly basis, HDB resale prices also increased 3.4% in Q4 2021 from the previous quarter.
OrangeTee & Tie’s Senior Vice President of Research and Analytics Christine Sun attributed the record growth to “price bidding wars and sky-high cash offers for many popular flats”.
Related article: Million-Dollar HDB Resale Flats in 2021: What’s So Special About Them?
Meanwhile, resale transactions dropped 5.8% to 7,940 cases in Q4 2021 from the previous quarter. When compared to Q4 2020, however, resale transactions in Q4 2021 rose 3.9%.
For the whole of 2021, resale transactions jumped 25.3% to 31,017 cases, up from the 24,748 cases in 2020.
With the announcement of the December 2021 cooling measures and how December tends to see a slowdown in transactions, it’s little surprise that Q4 2021 saw a dip in the number of resale HDB flat transactions.
Overall, prices increased at a blistering pace in 2021 due to decreasing supply as ongoing BTO construction delays pushed more into the HDB resale market.
For those who are looking to buy a resale HDB flat in the coming months, here’s a handy checklist to use when going for viewings:
3) Jalan Tembusu, Lentor Hills sites awarded to highest bidders
The tenders for the residential sites at Jalan Tembusu and Lentor Hills Road (Parcel A) have been awarded to their respective highest bidders, revealed Urban Redevelopment Authority (URA).
CDL Triton, a unit of City Developments Limited (CDL), submitted the highest bid for the Jalan Tembusu site at $768 million or $1,302 per sq ft per plot ratio (psf ppr). Beating seven other bidders, CDL plans to build a residential project with 640 units spread across four blocks of 20- to 21-storey towers at the site.
Meanwhile, the site at Lentor Hills Road was awarded to a consortium comprising GuocoLand (Singapore), Intrepid Investments and TID Residential, which submitted the highest bid of $586.6 million or $1,060 psf ppr. In an SGX filing, GuocoLand shared plans to build a residential project of about 600 units at the site.
The Jalan Tembusu and Lentor Hills sites will benefit from the construction of the Thomson-East Coast line (TEL). Both sites are within walking distance of TEL stations. Lentor MRT station is already in operation and Tanjong Katong MRT station is set to be completed in 2024.
4) Tightened monetary policy to have limited impact on property market
Economists expect the Monetary Authority of Singapore’s (MAS) decision to “slightly” raise the rate of appreciation of its policy band to only have a small impact on the real estate market, reported The Business Times (BT).
This comes as foreign investors mostly think in terms of the US dollar, said Vishnu Varathan, Mizuho Bank’s Head of Economics and Strategy.
He noted that the tightened monetary policy may even provide foreign buyers more confidence to invest within the city-state.
“Buyers have got a lot more faith in the Sing dollar being a lot more stable because of its trade weighted policy,” said Varathan as quoted by BT.
5) Landed home sales hit an all-time high in 2021
Singapore’s landed residential market registered an all-time high sales transaction value in 2021, at about $8.9 billion, revealed Knight Frank.
This comes even as total transaction value for landed homes declined 6.2% to $4.3 billion in 2H 2021 from $4.6 billion in 1H 2021.
Knight Frank noted that Good Class Bungalows (GCB) significantly moved sales last year, with the market posting an estimated sales value of $751.4 million in 2H 2021.
Meanwhile, the sales value of luxury non-landed homes eased 9% to $1.9 billion in 2H 2021 from 1H 2021, with 221 units shifted. Buyers continued to favour District 10, where 103 units were transacted.
Last year was a booming year for GCB transactions. Usually, those who buy GCBs do so with the intention to live in them; those interested in purchasing a GCB typically make an offer if they find a suitable property. This keen intent, the limited GCB supply, growing prices and perception of the property type create a potent combination to keep demand healthy.
Browse all GCBs in District 10 on PropertyGuru.
6) Developers show discipline in latest GLS tender
Lentor Hills site. Source: URA
Despite dwindling inventory of unsold private homes, developers showed discipline during the latest Government Land Sales (GLS) tender for two residential sites at Jalan Tembusu and Lentor Hills Road.
“Developers need to replenish landbank and yet they did not chase prices, which means a lot of developers were disciplined at the tender,” said Alan Cheong, Executive Director at Savills Singapore, as quoted by The Business Times (BT).
The tender for the sites closed on 18 January, after the government had introduced its latest property cooling measures.
One developer told BT that if the tender for the sites closed before the measures, the Lentor plot would have received eight bids instead of four. He also would have expected the Jalan Tembusu site to fetch 12 bids instead of eight.
In line with the Dec 2021 property cooling measures, Additional Buyer’s Stamp Duty (ABSD) rates for housing developers were hiked to 40% (35% ABSD may be remitted upfront subject to conditions, with non-remittable 5% ABSD). This factor may have led to developers exercising more restraint when bidding for a GLS site.
7) HDB issues $950mil Fixed Rate Notes
The Housing and Development Board (HDB) has issued $950 million, seven-year Fixed Rate Notes as part of its $32 billion Multicurrency Medium Term Note (MTN) Programme.
Rated AAA by Fitch Ratings, the notes come in denominations of $250,000 with a coupon of 1.971% per annum payable semi-annually in arrear. They are set to mature on 25 January 2029.
HDB noted that while approval in principle for the notes’ listing on the Singapore Exchange Securities Trading has been obtained, it should “not be taken as an indication of the merits of HDB, its subsidiaries or the notes”.
Periodically, HDB issues Fixed Rate Notes (or HDB bonds) to raise funds for government or stat board projects. The last time HDB issued Fixed Rate Notes was in May 2021.
8) Industrial rents, prices up in Q4 2021
Industrial property prices and rents continued to increase in the fourth quarter of 2021, rising 1.4% and 0.2%, respectively, from the previous quarter, according to JTC data.
On an annual basis, overall industrial prices climbed 4.4%, while rents increased 2%.
Edmund Tie noted that the hike was in line with the sector’s broad recovery and is a testament to the resilience of the sector during the COVID-19 pandemic.
Notably, the industrial property market registered an occupancy rate of 90.1% in Q4 2021, which is unchanged from Q3 2021, but is 0.2 percentage points higher than the previous year.
9) CapitaLand buys JCube for $340mil
CapitaLand Development (CLD) has agreed to acquire leisure edutainment mall JCube from CapitaLand Integrated Commercial Trust (CICT) for $340 million.
Located in Jurong Gateway, which is the commercial core of Jurong Lake District, the five-storey mall has a net lettable area (NLA) of 210,038 sq ft and a committed occupancy of 95.5% as of 31 December 2021, said CICT.
Upon completion of the acquisition, CLD revealed that CapitaLand Retail Management will continue to operate JCube while it explores options “to reposition or redevelop the mall in line with the gradual transformation of Jurong Lake District”.
10) Record $1.9bil in shophouse sales registered in 2021
Shophouse sales in Singapore hit a record high of $1.9 billion in 2021, exceeding the combined transaction values in 2019 and 2020 at $915.9 million and $912.7 million, respectively, reported Singapore Business Review citing Knight Frank.
This comes as over 50% of the 244 transactions last year fetched above $5 million.
Notably, freehold transaction volumes increased 51.6% year-on-year to 194 units, while freehold transaction values surged 84.1% year-on-year to $1.5 billion. Transaction volume for leasehold shophouses also increased to 50 in 2021 from 17 in 2020.
Looking ahead, Knight Frank expects the shophouse market to register a total sales value of $2 billion in 2022 as last year’s investor interest for shophouses would likely spill over, amid the imposition of the latest cooling measures.
Browse all shophouses for sale on PropertyGuru.
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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.
