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Singapore Residential Property Price Outlook

After more than one year under the effect of Covid-19, most of us realised the price of residential property is still edging up in Q1 of Year 2021 while the price of office and retail property declined over the last one year. This is not surprising for office and retail due to the impact of Covid-19 where working adults cannot all return to the office and a number of retail shops including F&B were affected by capacity control and dine-in restriction during this period.

For Residential, both private and HDB shows a strong resilency and price still appreciate in the same period. Those expecting the pandemics that resulted in the negative GDP for Singapore in Year 2020 should be dampening the residential property price. But it did not happen the way as it was during the SARS in Year 2003 and Lehmen Brother crisis in Year 2008.

There are mainly 5 key reasons I see attributing to this:

  • Many rounds of cooling measures since Year 2013 with the introduction of ABSD, SSD, LTV and TDSR/MSR had removed most of the speculation in the property market. Most buyers have the holding power to withstand any short and unfavourable market/economic readily. The chart below shows how private residential property price rises over the years, at worst there was a dropped of 0.7% in early 2019 (after introduction of cooling measure) and 1% when Singapore government started implementing the cooling measure. After that the private property start to rise again.
Private Property Price Index

This is quite similar to the HDB price trend last 3 years where HDB price has been trending up since Q3 2020 till now.

HDB resale price trend Q3 2018 to Q2 2021
  • The decrease in supply with constant demand from singapore buyers keep the price steadily higher for last few quarters. The dwindling unsold stock chart for private property shown the supply had been decreasing since 2019 Q1 to 2021Q1 while the demand of singaporean has remained stronger from 73.4% to 84.4% from Year 2010 to Year 2020 below.
  • The stability and well-managed COVID-19 cases in Singapore coupled with Singapore continue to attract foreign investments had provided enough confident for developers to bid for land price higher last few quarters and this will further support and pro-up residential property price. You may refer to the bided price of Ang Mo Kio Ave 1 site with land rate $1118 psf and Tengah Garden Walk (EC) of record land rate $603 psf in the latest transactions.
  • The surge in rental needs due to Singapore policy requiring working from home from time to time increase the housing and rental need that support the residential property market.
  • The low interest rate favour property investment. Currently mortgage interest rates provided by the banks below are quite low and is very attractive for property investment.

Though we see many launches coming up every month recently, you will be surprised by the available units that is snapped up easily and slowly after launch. For example the Treasure in Tampines launched in Mar 2019 that is expected to be TOP in Dec 2023 is now 84% sold.

With Singapore population of 5,894,651 by end of Year 2020 and a population expected at the lower end of 6.5 to 6.9 Millions people by Year 2030, Singaporean can expect a nett of up to 700,000 new home by then.

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