8th February to 14th February 2022
HDB resale prices are expected to increase at a slower pace this year as a record number of flats reach their Minimum Occupation Period (MOP). Singapore saw new private home sales held steady in January despite the latest cooling measures.
1) Hike in HDB resale prices to be slower as record number of flats achieve minimum occupation period
Analysts expect the prices of HDB resale flats to increase at a slower pace as a record number of flats reach their MOP this year, reported Today.
HDB resale prices are forecasted to increase by 4% to 8%, down from the 12.7% hike registered last year, albeit still significant by historical standards.
This comes as a record 31,325 HDB residential units are expected to reach their MOP this year.
Related article: 60 Freshly MOP-ed HDB Resale Flats in Singapore to Expect in 2022/2023
OrangeTee and Tie’s Senior Vice-President of Research and Analytics Christine Sun said the “spike in housing supply may exert some downward pressure on prices” in areas with a high number of flats that are past their MOP.
“Therefore, some areas may see prices rising at a much slower pace this year,” she added.
Demand for resale HDB flats largely come from families affected by BTO construction delays and couples put off by long completion times. Despite HDB’s plans to launch up to 23,000 new BTO flats per year in 2022 and 2023, prices are likely to remain high in the short-term until supply is fully restored.
Related article: HDB Flats in Singapore: BTO Price vs HDB MOP Resale Price 5 Years Later (2021)
2) New private home sales remain steady in January despite cooling measures
Launched in early December 2021, Mori is a freehold condo located in District 14, along Guillemard Road. Mori sold 61 out of a total of 137 units on its launch weekend.
Sales for new private homes held steady last month despite the introduction of new cooling measures last year, reported The Business Times.
Based on caveats lodged, analysts estimated that developers moved 639 new private homes in January, a slight 1.7% decline from the 650 units shifted in December 2021.
Lee Sze Teck, Senior Director of Research at Huttons Asia, noted that January’s sales volume is comparable to December 2021 even as only one project was launched last month compared to December’s three launches.
Including executive condominiums (ECs), new private home sales dipped 4.7% to 685 units last month.
While sales volume in December and January are expected to be lower due to the cooling measures and the festive lull period, it is encouraging to see that January’s sales did not drastically contract from the previous month, said Nicholas Mak, Head of Research and Consultancy at ERA Realty.
Alongside the influx of newly MOP-ed flats entering the market is a flood of HDB upgraders in 2022 and 2023. Flush with cash, these HDB upgraders typically buy larger HDB flats or new entry-level condos for own-stay, thus contributing to the demand for non-landed private property.
3) Wealth taxes may be introduced under Budget 2022
The government is expected to introduce wealth taxes at Budget 2022 in a bid to boost its coffers and reduce wealth inequalities, reported The Straits Times.
DBS Bank Senior Economist Irvin Seah noted that while some form of wealth tax is likely, the shape and form of the tax remains uncertain, given the recent introduction of property cooling measures in December 2021.
Grant Thornton Singapore’s Head of Tax David Sandison pointed out that real estate-based taxes are the “lowest hanging fruit” since they are easy to legislate and collect.
Shantini Ramachandra, Deloitte Private’s Tax Leader for Southeast Asia, however, believes that introducing a new wealth tax may be counter-intuitive to the government’s efforts to make Singapore into “a premier hub for wealth management and to attract foreign investors to invest, work and live in Singapore.”
4) REDAS wants longer project sales period for sites purchased before latest cooling measures
The Real Estate Developers’ Association of Singapore (REDAS) urged the government to extend the project sales period under the Additional Buyer’s Stamp Duty (ABSD) requirements on land purchased before 16 December 2021, reported The Business Times.
REDAS President Chia Ngiang Hong hoped the formula of land ABSD will be tweaked to be based on unsold units just like in the case of the qualifying certificate.
He noted that sales of units are forecasted to slow down given the significant increase in ABSD rates “for second and subsequent home purchases, as well as on foreigners”.
“Coupled with a ramped-up Government Land Sales (GLS) supply by the government, developers are concerned that they may not be able to sell all units in their current projects under the revised ABSD framework within the stipulated 5-year timeline,” he added.
5) Vicenta Lodge relaunched for collective sale, price lowered at $27.2mil
Source: Century 21
Vicenta Lodge, a 16-unit freehold development in Kembangan, has been relaunched for collective sale with a reserve price of $27.2 million, down from its $29 million price when it was launched in April last year, revealed PropNex Realty.
The price works out to a land rate of $983 per sq ft per plot ratio (psf ppr) or $968 psf ppr inclusive of the 7% balcony space.
Located at 16,18, 20, 22 Lorong Marzuki, the development occupy a 21,281 sq ft site zoned Residential under the 2019 Master Plan with a plot ratio of 1.4. It has a gross floor area of 29,794 sq ft and could potentially be redeveloped into 27 housing units averaging 1,076 sq ft.
The collective sale tender for Vicenta Lodge closes on 10 March.
While we saw the en bloc market pick up steam in the second half of 2021, the introduction of the Dec 2021 property cooling measures dampened momentum. As the Government replenishes land supply, fewer en bloc sales may occur, with developers going for small to medium sites in light of the new cooling measures.
6) $363mil contract for Pasir Ris East station under Cross Island Line awarded
The Land Transport Authority (LTA) has awarded a $363 million contract to design and build Pasir Ris East station under phase one of the Cross Island Line (CRL) to a joint venture between Singapore Engineering & Construction and Sinohydro Corporation (Singapore branch).
Construction of the Pasir Ris East station is expected to commence in the second quarter of 2022, while passenger service is set to start in 2030.
Once operational, travel time to Ang Mo Kio will be reduced from 60 minutes to about 25 minutes only, while commutes to Bright Hill will be cut from 80 minutes to 30 minutes.
The 12 stations built during Phase 1 of the CRL will serve over 100,000 households in the Pasir Ris, Loyang, Tampines, Ang Mo Kio and Serangoon North areas by 2030. Properties located close to the CRL’s MRT stations are likely to experience the “MRT effect” and see considerable price growth.
7) PropNex empowers financial literacy in a fun, gamified manner
Real estate agency PropNex has launched the Propnex Monopoly Championship 2022 in a bid to introduce insights on the Singapore residential market as well as financial literacy in a fun and gamified manner.
“We aim to empower consumers with financial literacy knowledge as property investment requires adequate financial planning and right strategies to succeed,” said PropNex CEO Ismail Gafoor.
“We are excited that many Singaporeans will have the opportunity to pit their skills and the overall winner of this 4-month championship game walks away with attractive prizes worth $108,000.”
The total price value at the Championship, which will be held from May till August at Furama Riverfront Hotel, is $308,000.
8) Stata office sales reach pre-pandemic levels in 2021
Sales volume in Singapore’s strata office market largely recovered to pre-pandemic levels last year, with 334 units sold, up 56.8% from the 213 units shifted in 2020, revealed Knight Frank.
Transaction values surged 90% year-on-year to $1.2 billion, a record high since 2014.
“Good quality strata office space located in the prime District 1 consistently topped sales in terms of quantum, with the $53.1 million sale of the ninth floor of Samsung Hub the top value sale in 2021 (excluding whole building sales),” said Knight Frank.
District 1 also made up 29.9% of last year’s total sales volume, while total transaction values within the district hit $731.2 million, a 141.7% hike from 2020.
9) CBD Grade A office rent to grow 4.6% this year
Grade A office rents in Singapore’s Central Business District (CBD) are expected to grow 4.6% year-on-year in 2022, while vacancy rates are forecasted to drop to below 4% by year-end, revealed Cushman and Wakefield.
This comes amidst a backdrop of projected sustained demand of 0.9 million sq ft and a limited supply of 0.8 million sq ft this year.
Technology and financial occupiers are expected to continue to be this year’s major sources of office demand.
“With anticipated strong rental growth, investors looking to deploy capital into safe-haven assets with healthy returns will find the Singapore office market appealing,” said Shaun Poh, Cushman and Wakefield’s Executive Director and Head of Capital Markets for Singapore.
10) Tenant sales at CICT’s downtown malls hit pre-pandemic levels
Tenant sales at the downtown malls of CapitaLand Integrated Commercial Trust (CICT) have hit pre-pandemic levels of 85% in December 2021, reported Singapore Business Review.
With this, UOB Kay Hian expects tenant sales, along with shopper traffic, at CICT’s downtown malls to improve further this year, due to the return of office crowds.
Notably, physical occupancy at office buildings has improved to 50% in January.
Aside from the increase in tenant sales, CICT also saw the occupancy rate at its retail spaces improve to 96.8% during the fourth quarter of 2021, or 0.4 percentage points higher than the previous quarter.
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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.
