
Singapore’s crane may get some time off as home prices cool in the city-state
Singapore home price growth slowed in the first quarter following the government’s introduction of cooling measures in December, according to official flash estimates released on Friday, with analysts now predicting that sales of new homes will remain muted for the rest of the year.
An index of private residential property prices published by Singapore’s Urban Redevelopment Authority (URA) inched up by 0.4 percent to 174.3 points in the first quarter from 173.6 points in the preceding three months – slackening from the 5 percent spike seen in the fourth quarter of 2021.
“The private residential market got off to a slow start in 2022 after what was an exhilarating performance last year,” said Ismail Gafoor, chief executive of PropNex Realty. “The cooling measures have certainly helped to tame price growth in Q1 2022 to a more sustainable pace.”
Compared to 2021’s full year growth of 10.6 percent, analysts predict that home prices across the city-state will remain subdued in 2022 due to the increased stamp and lending restrictions introduced four months ago and concerns over interest rate hikes.
Suburbs on the Rise
While the upward pace slowed, home prices in the city-state were able to keep moving northwards from January through March, marking the eighth consecutive quarter of growth since the index dropped by one percent in the first quarter of 2020 in response to COVID-19 concerns. Overall home prices this quarter were up by 7.5 percent compared to the same period in 2021.

Ismail Gafoor of PropNex Realty
While growth was tepid on a market-wide basis, prices for landed housing, which include bungalows, shophouses and strata landed housing, grew by four percent during the first quarter, accelerating from the 3.9 percent rise recorded during the previous three months.
The non-landed sector took a more direct hit from the cooling measures, with the price index for condos and apartments dipping by 0.6 percent during the period. That drop reversed the 5.3 percent increase recorded in the sector in the fourth quarter, with properties in core markets leading the way down.
URA estimates showed prices for residential properties in prime areas, including locations in the core central region such as Raffles Place and Tanjong Pagar, fell 0.5 percent in the first quarter after having climbed by 2.7 percent during the preceding three months. The rest of the central region fell more steeply – dropping by three percent during the same period – after having risen by 6.7 percent from October through December.
Home sales outside Singapore’s central region showed less impact from the cooling measures as prices rose by 1.9 percent last quarter, although this still showed a marked deceleration from the 5.7 percent price increase witnessed in the same locations over the preceding three months.
Gafoor said that, aside from changes in local policy, growing uncertainties such as the impact of Russia’s invasion of Ukraine on global supply chains and rising inflation undermined demand from homebuyers during the period.
“These uncertainties could also have weighed on market sentiment and buying interest during the quarter. Another downside risk to watch is rising interest rates – a much steeper borrowing cost may negatively impact sales,” he added.
Separate URA estimates showed that the volume of new private homes sold dropped by 22.5 percent to 527 units in February from the 680 homes that exchanged hands in January, as sales declined across all three regions. February home sales were also down 18.3 percent from the 645 units sold during the same month one year earlier.
Island Chilled
With home sales slowing, Knight Frank Singapore research head Leonard Tay predicts that home price growth will cool markedly this year, with the overall uptick in the URA index set to stay within the 1 to 3 percent range, while PropNex Realty estimates that prices could rise by up to 5 percent.
“The private residential market in 2022 is expected to be more subdued compared to 2021, taking into consideration the cooling measures and expected interest rate hikes,” Tay said in a note on Friday. “Nonetheless, underlying demand for private homes by owner occupiers continues to remain strong, contrasted against a shrinking inventory of saleable stock.”
He said the impact of the cooling measures will still be felt this quarter “before fundamental buyer demand re-establishes itself” later in the year, especially once bigger projects launch.
Singapore’s recent reopening of its borders should also help buoy demand during 2022’s remaining next nine months, Tay said, expressing faith that there is an adequate number of wealthy foreigners with pockets deep enough to absorb the 30 percent additional buyer’s stamp duty levied in December in order to buy their own piece of Singapore.
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