Singapore’s ‘robust’ Q2 property market shows signs of price slowdown

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The second quarter of this year can be considered robust for the real estate market, with large condominium launches reaching high prices and good sales volumes, according to a report.

However, there are signs that a price slowdown is ahead, PropertyGuru’s latest housing market report noted.

Image: PropertyGuru Singapore

The report looked at figures for property sale and rental prices, supply and demand, as well as data from the Urban Redevelopment Authority (URA) and the Housing and Development Board (HDB).

The data shows that despite rising mortgage rates, the second quarter was robust. There was a quarter-on-quarter growth of 3.69% in the Singapore Property Sales Price Index, which is significantly higher than the 1.98% growth from the previous quarter. .

Additionally, developer sales jumped from 1,825 to 2,397 in the second quarter of this year, while private non-land property sales also climbed from 3,377 to 4,236.

Image: PropertyGuru Singapore

“Rising borrowing costs appear to have had only a limited impact on buying sentiment,” PropertyGuru noted.

In addition, rental prices have risen steadily and are now at a 16-quarter high. The rental price index rose by almost 5% this quarter.

Image: PropertyGuru Singapore

One thing to note in the report is that while asking prices for HDB resale apartments have reached a new high, a slowdown in prices is expected.

However, for the third quarter of the year, prices are still expected to rise, albeit in small increments, “despite widespread sentiment that the average buyer is becoming more resilient and unwilling to match high asking prices,” PropertyGuru said.

Also noteworthy is the number of HDB flat transactions of $1 million, which at the end of the second quarter was already higher than in 2021.

The report indicates that 2022 could be a banner year with more than 300 million apartments traded.

Hougang/Punggol/Sengkang, Bukit Batok/Bukit Panjang and Sembawang/Yishun are the best performing areas when it comes to HDB resale apartments.

Image: PropertyGuru Singapore

PropertyGuru however noted: “While HDB resale apartment prices have reached a new high, there are signs of an impending downturn. Transaction volumes are in constant decline and the gains recorded are more modest than those of the previous year.

The report notes that mortgage rates have continued to rise, but this has not had a significant impact on private property buying sentiment.

For HDB rental properties, price and demand fell for the first time in three years.

The quarter-over-quarter decline is less than 1%, but could still mean a downturn is ahead for the HDB rental market.

For now, singles and unmarried couples, as well as foreigners, are still keeping the HDB rental market afloat. But with more BTO apartments being built, rental market demand and prices are expected to decline. /TISG

Bukit Batok and Marine Parade join million dollar club as HDB resale apartments reach record prices in July

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