Irwell Hill Residences Landscaping

Singapore’s private housing market is likely to stay stable, with new launch activity ramping up in the second half of the year. This comes as the market remains buoyed by positive buyer optimism and abundant liquidity.

In Q2 2021, a total of 8,449 units were transacted in the main and secondary markets, representing an increase of 4.3 percent quarter on quarter (QoQ) and a significant 217.2% on year (YoY) “due to a low base impact resulting from the circuit breaker period in Q2 2020.”

Secondary sales accounted for the bulk of transactions in Q2 2021, accounting for 5,483 units, a 19% increase over the previous quarter.

Sales in the main market, on the other hand, fell 15.1 percent from Q1 2021 to 2,966 units as developers postponed or restricted new launch activities in response to the government’s stricter COVID-19 safety regulations, which were implemented in May.

The Central Core Region (CCR) had the greatest quarterly growth rates in primary sales, at 19.4%, and secondary sales, at 29.1%.

Edmund Tie attributed the significant rise in primary sales to a 46.8 percent increase in new releases in Q2 2021, “which at 1,019 units was the largest out of the market categories.”

“Living in premium and downtown locations continues to attract property buyers, with developments like as One Bernam and Irwell Hill Residences doing well and contributing to the CCR’s excellent primary sales performance in the second quarter of 2021. Upmarket residential living that provides connection and closeness to town still has appeal,” said Lam Chern Woon, Head of Research and Consulting at Edmund Tie.

In Q2 2021, primary sales fell 37.5 percent year on year in the Rest of Central Region (RCR), while secondary sales rose 9.2 percent year on year.

Outside Central Region (OCR) main and secondary sales increased by 1.6 percent and 20.7 percent, respectively, year on year.

In the non-landed primary market, 32.3 percent of sales were for apartments of 500 to 700 square feet, indicating “healthy mass market demand for smaller and more affordable units against the background of increasing property prices.”

Meanwhile, the percentage of sales for the smallest unit type of less than 500 square feet fell from 12.7 percent in Q1 2021 to 9.4 percent in Q2 2021.

Bigger units larger than 1,000 square feet, on the other hand, had a rise in the percentage of transactions, accounting for 27.3 percent of primary sales during the period under study.

“Despite their reduced price tag, studio apartments seem to have lost some of their attractiveness as more house buyers seek bigger rooms to suit work-from-home arrangements,” Lam added.

In terms of pricing, 38.2 percent of primary sales in Q2 2021 were for units valued between $1 million and $1.5 million, down from 47.6 percent in Q1 2021.

A similar drop was seen for apartments valued less than $1 million, which fell from 15.6 percent in Q1 2021 to 5.4 percent in Q2 2021.

According to Edmund Tie, the decrease is “likely attributable to increasing housing costs and a preference shift away from smaller houses.”

It went on to say that the trend away from smaller units is being bolstered by an increase in the percentage of transactions for units over $2 million, from 21.2 percent in Q1 2021 to 24.1 percent in Q2 2021, accounting for almost all main transactions.

Foreign buyer purchases (non-PR) dropped 2.7 percent to 284 units in Q2 2021, from 292 units in Q1 2021.

“The decrease had no effect on the CCR, which rose by a remarkable 35.8 percent QoQ in Q2 2021, from 109 units to 148 units,” Edmund Tie stated.

The CCR surpassed the RCR in terms of the number of transactions done by foreign purchasers, as international buyers moved to a more familiar sector. In Q2 2021, the Mainland Chinese remained the leading foreign purchaser across all areas.

The property consultant also showed that the entire market’s loss-making proportion fell from 14% in March to a record low of 10.5 percent in May before rebounding back to 13.8 percent in June.

Profitability in the secondary market increased over the first two months of Q2 2021, until house viewing limitations went into place in mid-May, affecting transaction profitability in June.

“As the government continues to relax safety regulations in the face of increasing vaccination rates, owners may expect greater confidence in their marketing efforts. Resale profitability may improve somewhat in the next months, assuming no new house viewing restrictions are imposed or the economic situation worsens,” added Lam.