Growth in private home prices accelerated by 3.5% in 2Q2022

By EdgeProp Singapore
/ EdgeProp Singapore |
Best-selling project in 2Q2022 was Piccadilly Grand with 325 units sold at an average price of $2,184 psf (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) - Private home prices in Singapore increased by 3.5% in 2Q2022, according to URA. This was slightly higher than the flash estimate of 3.2% released on July 1. The 3.5% q-o-q increase is significantly higher than 1Q2022’s 0.7% increase, according to URA data released on July 22. This brings the overall private home price increase to 4.2% in 1H2022.
“The stronger price gains were due to new launches, strong demand for homes and the return of foreigners,” says Lee Sze Teck, Huttons Asia senior director of research.
Developers launched 1,956 units for sale in 2Q2022, more than three times the units launched for sale in 1Q2022. The launch of two major projects in May – Piccadilly Grand and Liv @ MB — pushed up the overall sales in 2Q2022 to 2,397 units, 31.3% higher than the previous quarter. Both projects located in the Rest of Central Region (RCR) were well-received by buyers and sold more than 70% of their units on launch day, notes Huttons’ Lee. They likely contributed to the price gains of 6.4% in the RCR in 2Q2022, he adds.

Table 1: Top 10 Bestselling Projects in 2Q2022

Units Sold
Average Price
$2,184 psf
$2,411 psf
$1,865 psf
$2,806 psf
$1,770 psf
$2,342 psf
$2,541 psf
$1,431 psf
$2,245 psf
$2,784 psf
Source: URA, Huttons Research (Based on caveats downloaded on 22 Jul 2022)
Home purchases by foreigners totalled 296 units in 2Q2022, based on caveats lodged, double the volume in 1Q2022, when foreigners purchased 147 units. Huttons’ Lee attributes this to the opening of borders to vaccinated travellers, who gave a boost to sales of projects in the Core Central Region (CCR) and RCR. In 2Q2022, a total of 592 homes were sold in the CCR, 64% higher than the previous quarter.

Table 2: Top 5 Projects with sales to foreigners in 2Q2022

Project Name
Purchases by Foreigners
Source: URA, Huttons Research as of 22 July 2022
The 616-unit North Gaia (pictured above) in Yishun, launched in April, is the first EC project launch this year until 4Q2022, when there will be two more EC projects in the pipeline for launch, namely Copen Grand in Tengah and Tenet in Tampens (Photo: Samuel Isaac Chua/EdgeProp Singapore)
In the executive condo (EC) market, developers sold 193 units in 2Q2022. The 616-unit North Gaia, launched in April, is the only new EC project launched this year so far until 4Q2022, when Copen Grand at Tengah Garden Walk and Tenet at Tampines Street 62 are expected to preview.
“Overall, there are more buyers than there are sellers in the current home market,” observes Leonard Tay, head of research for Knight Frank Singapore. “The current tight supply of saleable inventory is playing catch-up with demand, due to a backlog of delayed new completions and lack of development land acquisition during the initial years of the pandemic.”
As at the end of 2Q2022, there were 15,805 unsold new private homes (excluding ECs), up from the 14,087 unsold units at the end of the previous quarter, according to PropNex Research. Of the 15,805 unsold units, 6,036 units were in the CCR, 5,383 units in the RCR and just 4,386 units in the Outside Central Region (OCR).
“In the recent months, the absence of major OCR launches has created a pent-up demand for such homes and we expect this to translate to relatively strong sales for mass market launches in the pipeline, kicking off with the launch of AMO Residence in Ang Mo Kio this weekend [July 23],” says Ismail Gafoor, CEO of PropNex. According to sources, the developer collected 1,491 cheques as expression of interest, which means the 372-unit project is four times subscribed ahead of its launch.
Amo Residence is believed to have been four times subscribed, with 1,491 cheques collected as expressions of interest ahead of the launch on July 23 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Upcoming launches in 3Q2022 are all located in the Outside Central Region (OCR). The launch of AMO Residence will be followed by boutique developments such as the 19-unit K Suites and 34-unit Kovan Jewel, as well as the 605-unit Lentor Modern, 158-unit Sky Eden @ Bedok and 105-unit The Arden.
Sky Eden @ Bedok will be the first new project to be launched in Bedok Town Centre since the launch of Bedok Residences more than 10 years ago. Meanwhile, Lentor Modern will be the only integrated mixed-use development in the new Lentor precinct, notes Huttons Asia.
“These projects will drive price gains in 3Q2022,” says Huttons’ Lee. “Foreigners are continuing to buy homes in Singapore and will support prices in the CCR and RCR,” he adds. “The strong demand from HDB upgraders will translate to robust sales in the OCR.”
In 2Q2022, resale properties accounted for 62.2% of overall home sales, according to PropNex Research. It reflects the limited options in the new launch market as well as the preference for move-in-ready resale units among some buyers, according to Gafoor. “Furthermore, the faster pace of price increase in the primary market may also channel some buyers to the resale market, where prices are rising at a slower clip,” he says.
Source: PropNex Research, URA
However, resale prices are expected to continue their upward trend, adds Gafoor. He attributes this to “tight resale stock”, with some owners preferring to hold on to their investment property for rental income amid the hot leasing market.
Rents of private residential properties shot up by 6.7% in 2Q2022 which was “the fastest quarterly increase since 4Q2007”, comments Huttons’ Lee. “Landlords are raising rents to cover the increase in interest costs,” he says.
Further increase in interest rates may test the affordability threshold of some would-be buyers with tight budgets, resulting in some dropping out of the market, observes PropNex’s Gafoor. Still, PropNex remains “relatively optimistic” about private home sales in 2022, in view of the low inventory and resilient demand from Singaporeans and foreigners as well as the reopening of borders.
“We expect private home prices to continue to increase gradually for the rest of the year, with upcoming launches stimulating price growth,” says Gafoor. “In addition, the firm land prices, rising construction costs, and healthy homebuyer demand will also exert some upward pressure on home values.”
Huttons’ forecast is that developer sales could end the year 2022 with 9,000 units, while private home prices are expected to increase up to 8%.
Check out the latest listings near AMO Residence, Piccadilly Grand, LIV @ MB, North Gaia, CanningHill Piers

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