19th July to 25th July
Private home prices and HDB resale prices continued on an upward trajectory in the second quarter of 2022, rising 3.5% and 2.8%, respectively, from the previous quarter. Meanwhile, AMO Residence received robust interest, selling 98% of its units during its first day of launch.
1) Private home, HDB resale prices continue to increase in Q2 2022
Private home prices in Singapore rose at a faster pace of 3.5% in the second quarter of this year, compared to the 0.7% hike in the previous quarter, showed Urban Redevelopment Authority (URA) data.
Prices of non-landed homes increased 3.6% in Q2 2022, while landed home prices climbed 2.9%.
“The private residential market saw a rebound as many developers ramped up launches and more buyers streamed back to the market last quarter,” said Christine Sun, Senior Vice President of Research and Analytics at OrangeTee & Tie.
She noted that buying sentiment picked up following the easing of most COVID-19 safe management measures. Show flat and house viewings also rose substantially, “significantly boosting the sector”.
Meanwhile, prices of resale Housing and Development Board (HDB) flats also continued to increase, rising 2.8% in Q2 2022 compared to the 2.4% hike posted in the previous quarter, showed HDB data.
This comes even as transaction volumes fell 1.7% to 6,819 units in Q2 2022, from 6,934 units in Q1 2022.
OrangeTee, however, believes that sales volume remains “at a healthy level considering prices have increased for many consecutive quarters”.
2) Over 98% of AMO Residence sold on the first day of launch
AMO Residence, a joint venture project between UOL Group, Kheng Leong Company and Singapore Land Group, sold over 98% of its 372 units during the first day of its launch on 23 July 2022, reported The Business Times.
In fact, only seven units were left unsold at the 99-year leasehold project, where unit prices started from $1,890 per sq ft (psf).
AMO Residence offers two- to five-bedroom units ranging between 614 sq ft and 1,475 sq ft, as well as three penthouses ranging from 2,293 sq ft to 2,497 sq ft. It is understood that the two- and four-bedroom units were completely sold out.
“There is strong underlying demand as it is the first major private residential project in the mature housing estate of Ang Mo Kio in more than eight years,” said Anson Lim, General Manager (Residential Marketing) at UOL.
PropNex Realty’s Head of Research and Content Wong Siew Ying attributed the brisk sales at the project to its attractive location.
Notably, AMO Residence is located “in a mature estate with a range of amenities in the vicinity, as well as proximity to the Mayflower MRT station and good schools”.
3) Rising interest rates unlikely to dampen housing demand until they rise above 3%
Several property analysts do not expect the recent hikes on mortgage rates to dampen demand for both private and public properties unless interest rates rise above 3%, reported TODAY.
As of 22 July 2022, the fixed rate for DBS Bank’s two-year home loan packages is 2.75% and 2.98% at OCBC.
Despite the increased rates, Nelson Lim, Key Executive Officer of Altitude Real Estate, believe “there is always a market” for genuine buyers in need of a house to live in rather than invest in.
He pointed out that rising interest rates will only temper the expectations of buyers on the kind of home they can acquire as well as the amount of money they can borrow.
“By and large…even though there’s an increase in the interest rates, it is still affordable at this point,” Lim said. “So I do not see interest rates as being a very big deterrence for people buying property.”
Meanwhile, JLL sees no major risks or bubbles within the Singapore residential market due to the cooling measures introduced by the Government since 2010 to moderate price hikes and demand, reported The Business Times.
4) Prices continue to appreciate for ageing 99-year leasehold condos, study
Unlike the common perception that prices for an ageing 99-year leasehold condominium will decline, a new study found that prices for such units continued to increase over the last 13 years, reported The Business Times.
A team from ERA Research & Consultancy examined transaction data for condos which are at least 35 years old. This means that 13 years ago, such condos were already at least 22 years old and starting to age.
The results showed that ageing condos on decaying leases remain a good store of wealth. However, it noted that the rate of price growth for these condos is slower compared to the benchmark – which is the median price of all 99-year leasehold resale condos regardless of age.
“The older the condo, the wider the gap in the rate of price growth it experiences compared to the benchmark,” said Nicholas Mak, Research and Consultancy Department Head at ERA Realty.
“In other words, if you put $1 million in a condo regardless of age versus an older one, and hold it for 10 years, you will see a difference, with slower price growth for the latter. After 12 years, the gap widens further.”
5) Singapore residential property market stable, on a sustainable path
Singapore’s central bank believes the city-state’s residential property market is stable compared to other cities and is on a sustainable path, reported Bloomberg.
Monetary Authority of Singapore’s Managing Director Ravi Menon noted that property prices in Singapore have generally moved in line with the growth of nominal income and that authorities would bring it back if it is misaligned.
The statement underscores the cautious approach taken by the Asian financial hub in dealing with a property boom which showed initial signs of cooling.
Last month, Singapore home sales plunged to its lowest level in over two years, as concerns about interest rate hikes dampened demand. Home prices also grew over the first six months.
For the first time since 2018, authorities rolled out property cooling measures in December last year to address a lack of affordability and the risk that households may struggle to settle their mortgages at higher rates.
6) Property investment sales drop 36.9% in Q2 2022
Singapore saw property investment sales drop 36.9% quarter-on-quarter to $6.8 billion in the second quarter of 2022, revealed Colliers.
This comes as all asset classes registered a decline in sales, following a robust performance in Q1 2022.
In Q2 2022, commercial and residential sales fell 58% and 17.6%, respectively, over the previous quarter, while industrial sales declined 29%.
Colliers noted that the Q2 figure brought the total property investment sales for the first half of 2022 to $17.7 billion, up 46.3% over the same period last year.
“Despite the geopolitical headwinds and external uncertainties that continue to plague the economy, Singapore’s safe haven status, as well as investors’ confidence in Singapore as a competitive and attractive business destination will continue to lend support to the market,” said Catherine He, Director and Head of Research for Singapore at Colliers.
With this, the property consultancy expects full-year 2022 transaction volume to increase 15% year-on-year, with total transaction value forecasted to reach $32.6 billion.
7) Private home prices to increase 5-7% this year
Private home prices in Singapore are expected to increase by about 5% to 7% for the whole of 2022 as demand outpaces the backlog of supply as the city-state normalises from the pandemic years, said Knight Frank.
Notably, the figure is up from its initial conservative forecast of between 1% and 3% growth when the property cooling measures were first unveiled by the Government in December 2021.
The property consultancy noted that while the rising interest rates may serve as a natural cooling measure that will rein in homebuyer affordability, buyers have also shown “an unanticipated resilience, the kind that will now embolden developers to launch projects to tap on this buyer demand before interest rates rise further”.
8) RTS Link to improve connectivity between Singapore, Johor
The Johor Bahru – Singapore Rapid Transit System (RTS) Link has the capacity to hold 10,000 commuters during peak periods. Source: LTA
Transport Minister S Iswaran expects the opening of the Johor Bahru-Singapore Rapid Transit System (RTS) Link to improve connectivity between Singapore and Johor as well as further strengthen ties, reported CNA.
“When opened for service in end-2026, the RTS Link will improve connectivity between Singapore and Johor, and further strengthen our ties,” he said.
He made the statement following a visit to the Woodlands North terminus site, where he hosted Johor Sultan Ibrahim Ibni Almarhum Sultan Iskandar, Johor Chief Minister Onn Hafiz Ghazi as well as other state officials.
During his visit on 21 July 2022, the Johor Sultan witnessed the rock removal process via a controlled blasting method.
To run between Malaysia’s Bukit Chagar station in Johor Bahru and Singapore’s Woodlands North station, the 4km rail shuttle service is expected to transport up to 10,000 passengers per hour in each direction once it commences operation by end-2026. Travel time between the two stations will be around five minutes, showed a joint factsheet from Singapore’s Transport Ministry and the Land Transport Authority.
9) DBS officially opens net zero building
DBS bank has officially opened Singapore’s first net-zero building by a bank, reported CNA.
A net-zero building is one that consumes only as much energy as it produces.
The 30-year-old building in Newton has been retrofitted to feature more than 1,000 sq m of solar panels on its rooftop as well as self-powered solar air-conditioning systems, lamp posts and exhaust fans. It has also been fitted with a slatted bamboo exterior to shade the building.
Moreover, 10% of its previously air-conditioned floor area has been converted into naturally ventilated spaces.
DBS shared that retrofitting works at DBS Newton Green started in mid-2021 and cost over $5 million.
“We see DBS Newton Green as a beacon for what the office of tomorrow should be. It is a living testbed for innovative sustainable technologies which can be scaled up not only to the rest of our offices, but also other organisations looking to green their footprint,” said DBS CEO Piyush Gupta.
“This we believe will contribute positively to Singapore’s ambition to become a leading regional hub for developing sustainability solutions as a new engine for economic growth.”
10) JTC awards Tampines North Drive 5 site
The tender for an industrial site at Tampines North Drive 5 (Plot 9) has been awarded to a joint venture (JV) comprising Daiya Engineering and Construction as well as Zulin (S.E.A), revealed JTC.
This comes after the JV, which is the sole bidder for the site, submitted a bid of $7.51 million.
Zoned for Business 2 use, the 4,911.8 sq m site has a gross plot ratio of 2.5 and a leasehold tenure of 30 years. It has a project completion period of 60 months.
JTC launched the Reserve List site for sale on 26 April 2022 after it received an application for the land parcel to be put up for tender, with a committed bid of not less than $7 million.
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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.
