6 biggest trends in the Singapore property market now
Since the start of 2019, the Singapore property market appears to be turning a corner, with growing private residential home sales every month, and the private property price index on a gradual uptick. You would have probably visited a number of showrooms for some of the upcoming new launches, and received a flyer or two from smiling property agents near your home.
If you’re interested to buy a new home or sell your current one, here are some major property trends to watch for in 2H2019.
1. More new launches than ever before
This year, an estimated 19,000 new homes – spread over 60 new developments – are launch ready according to OrangeTee & Tie research data, though about 12,000 to 14,000 are expected to be launched this year, and the rest to be gradually released in 2020.
As more launches often lends itself to higher sales volumes, between 9,000 and 10,000 new homes are expected to be sold this year. In contrast, just under 9,000 units were launched in 2018, and a similar number of new homes were sold in the same period.
2. More supply of freehold condominium units
On a similar note, with the increased number of newly launched develops, more freehold units are expected to be made available in the market.
There has been a surge in sales of freehold condominium units in May and June, as many of the freehold sites were purchased during the previous collective sale cycle. This trend is expected to continue as more freehold units from such sites are launched for sale in the coming months. As such units are hard to come by, particularly in the prime districts, homebuyers are expected to keep their eyes peeled for them.
“This could be a good opportunity for buyers to snag a freehold property; otherwise they may have to wait for the next collective sales cycle that is likely to take place many years down the road,” said Christine Sun, Head of Research & Consultancy at OrangeTee & Tie.
3. More homes in HDB market reaching MOP
Over 30,000 HDB flats are expected to reach their minimum occupancy period (MOP) this year, 70% more than the 17,000 HDB flats that reached MOP in 2018. In fact, in 2020 and 2021, another 49,000 new HDB flats are expected to reach MOP.
“The increased supply of new flats may attract more buyers as some of these resale flats are well located in mature estates or are built with new design concepts in the non-mature estates,” explained Sun.
As such, the resale market for HDB flats is set to see more activity, as more HDB flats may be put up for sale this year, particularly in areas like Sengkang, Punggol and Yishun. Orangetee & Tie research estimates that the number of HDB resale transactions could reach between 22,000 and 24,000, on the back of a healthy 23,099 transactions in 2018.
4. Purchases of super luxury homes could move the needle on home prices
In June, private residential resale prices fell 0.4% from May’s numbers, led by the 0.7% price decline in the Core Central Region (CCR) or the prime districts. Incidentally, the overall decline was attributed to the fewer numbers of super luxury homes that changed hands.
19 resale condominiums were sold above $3000 psf in May, with two condominiums sold above $4000 psf. These super luxury units were located at South Beach Residences, Boulevard Vue, Le Nouvel Ardmore, 3 Orchard By-The-Park, New Futura, TwentyOne Angullia Park, Ardmore Park and 8 Saint Thomas, according to Sun. In June, only 11 resale condominiums were sold above $3000 psf.
As Singapore remains home to some of the most expensive non-landed super luxury apartments in the world, it bears reminding that a few single transactions can skew overall numbers when they occur.
5. More cooling measures loom on the horizon
MAS managing director Ravi Menon recently remarked that the cooling measures implemented in 2018 had been effective, as it reined in home price growth, as well as the bids for government land sites and private collective sales.
While Menon has assured that the government does not intend to depress property prices, they are still monitoring the property market to “ensure a healthy and sustainable market.”
As such, homeowners should continue to keep a watchful eye on rising property prices to remain clued in on possible further cooling measures when doing any property transactions.
6. Possible changes in interest rates
Interest rates in Singapore, like the SIBOR and SOR follows closely behind the changes in US interest rates, stipulated by the US Federal Reserve. The Fed appears to be backtracking from its intended three 25 basis points interest rate hikes this year, amid the uncertainties from the US – China trade war. If this materialises, it could impact home loans and home loan refinancing rates for Singapore home buyers.
What’s next then?
If you are planning to buy or sell a property, do take note of these major property trends, know your needs and budget, and seek advice from a trusted property advisor before you take the plunge.