Table of Contents
The year 2021 has been a good one for the Singapore real estate market, which has shown remarkable endurance in the face of the COVID-19 epidemic.
Despite constantly-changing safe management procedures based on the number of COVID-19 incidents in the neighborhood, Singaporeans have proved that they are more adaptive than ever before and have not allowed this deter them from purchasing property.
Looking back at 2021
Property prices and sales have risen for six quarters in a row, defying all odds and confounding all patterns. The market continued to thrive even during customary quiet seasons, such as the Lunar Seventh Month in August and September.
Property activity in 2021 was mostly driven by local purchasers since most borders remained closed until the second part of the year.
In 2021, over 25,000 HDB apartments will have completed their Minimum Occupation Period, resulting in a surge in demand for bigger HDB resale flats and entry-level condominiums. The luxury market also had a resurgence, with some record-breaking deals making headlines throughout the year. There were also a lot of Good Class Bungalows that changed ownership.
Despite rising costs, the government said in June 2021 that the market was not yet “overheated,” putting an end to rumors. To moderate the costs of future HDB units in desirable areas, the government adopted a new Prime Location Housing (PLH) model in October 2021.
What should you expect in 2022?
Since the circuit breaker in Q2 2020, prices have climbed every quarter, and although the rate of growth is reducing, we predict property prices to rise throughout the rest of 2022.
The effect of HDB upgraders is set to continue, with a projected 31,000 HDB apartments coming off their MOP in 2022. Furthermore, if Singapore continues to reopen its borders through Vaccinated Travel Lanes, international investors will return to the market (VTLs).
Only roughly 11 new launch projects are expected in 2022. The government has been aggressively cutting down on land availability over the last several years, which has resulted in a shortage of new launches. There was a small buzz in the collective sales environment this year as the GLS pipeline tapered.
Only 11 new collective development were put up for tender in Q3 2021, compared to roughly 25 last year. It’s unclear how many will be sold in the end. The supply for the next several years will be determined by this.
In early 2020, the US Federal Reserve reduced interest rates to near-zero in reaction to the COVID-19 epidemic. In 2021, global interest rates and local mortgage rates both rose significantly, although they have mostly stayed low. The current house purchasing craze has been aided by the availability of inexpensive financing, since it is now considerably cheaper to take out a home loan than it has been in years.
The US Federal Reserve just declared that it would hike interest rates at least twice in 2022. While a sharp increase is improbable, Singapore mortgage rates will almost certainly rise gradually.
“Interest rates may increase in the long run, but they are expected to stay low in the near to medium term,” says the report. — PropertyGuru’s Paul Wee
Finally, there is talk of imposing a wealth tax to address Singapore’s rising wealth imbalance.
The government has said that although it agrees with the concept of a wealth tax, it is “not straightforward to execute.” The present difficulty is determining how to apply the tax on a wide variety of assets, including property, in an equitable manner.
2022 New Project Launches
Above is the launches expected in 2022. Visit Property Launches 2022 List for latest update.
In 2022, we will almost certainly still be grappling with safe management procedures in our everyday lives. Given how successfully the majority has adjusted this year, it is unlikely to have an impact on the housing market, which is predicted to continue to thrive.
