Singapore's private home prices rise by 3.5% in Q2, five times the increase in previous quarter

Singapore's private home prices rise by 3.5% in Q2, five times the increase in previous quarter

Roger Pettingell Sarasota Real Estate

RENTALS

Rentals of private homes increased by 6.7 per cent in the second quarter, compared with the 4.2 per cent rise in the previous quarter.

Rentals of non-landed properties in the core central region increased by 7.7 per cent in the second quarter, while those in the rest of the central region rose by 5.9 per cent.

Rentals of non-landed properties outside the central region increased by 7.7 per cent.

Rentals of landed properties increased by 3.2 per cent in the second quarter, slower than the 5.3 per cent rise in the previous quarter.

Ms Sun added that more tenants are signing lease periods of at least two years to lock in the current rental rate, as they anticipate that rents will rise further in the coming months.

Mr Lee Sze Teck, senior director of research at Huttons Asia, said landlords are raising rents to cover the increase in interest costs.

SUPPLY

Developers launched 1,956 uncompleted private residential units, excluding ECs, for sale in the second quarter, up from 613 units in the preceding quarter.

A total of 2,397 private homes, excluding ECs, were sold in the second quarter, up from 1,825 in the first three months of this year.

In total, about 30,700 units including ECs are expected to be completed in 2022 and 2023, said URA. This is nearly three times the 10,400 units completed in 2020 and 2021. 

“This will help to cater to housing needs in the immediate term. More supply with planning approval, totalling 27,000 units as of the second quarter of 2022, will be completed beyond 2023,” the authority added.

In total, about 25,500 units could be made available for sale later this year or next year, said URA. 

“The Government has significantly increased the supply of private housing on the confirmed list for the GLS (Government Land Sales) programmes in 2022 to cater to the strong housing demand, and will continue to monitor economic and property market conditions closely and calibrate housing supply to keep the property market stable and sustainable,” it added.

OUTLOOK

Ms Sun said macroeconomic influences, such as global inflation, interest rate hikes, supply chain disruptions and lockdowns in China, may play a more central role in determining housing demand and property prices in the second half of the year.

Mortgage rates are rising in Singapore after the US Federal Reserve increased its rates to tame inflation.

Mr Lee said interest in some upcoming launches in the third quarter should garner interest. These include new homes in Ang Mo Kio, Kovan and Lentor.

The new projects will drive price gains in the third quarter, and there will still be strong demand from Housing and Development Board (HDB) upgraders, he added.

He said private home prices are expected to increase up to 8 per cent this year.

“Amid global headwinds, Singapore’s robust economic growth and consistently high employment rate may help cushion homeowners from the impact of the global economic uncertainties,” said Ms Sun.

“Moreover, investors flocking to traditional save havens to preserve their capital may still park their money here as our property investment market is considered one of the safest and most stable in the world.”

She said prices of new homes excluding ECs may rise by 6 per cent to 8 per cent this year.


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