Private residential property index up by 0.4% in Q1 2022

It shows a slower rise compared to 5.0% increase in the previous quarter.

The private residential property index in Singapore rose by 0.7 point from 173.6 points in the fourth quarter in 2021 to 174.3 points in the first quarter of 2022, the nation’s urban planning authority, data from Urban Redevelopment Authority (URA) showed.

This shows a slower increase of 0.4% compared to the 5% rise in the previous quarter, URA said.

The cost of non-landed private residential properties in the Core Central Region dropped by 0.5%, compared to the 2.7% increase in the previous quarter. 

Prices in the Rest of Central Region (RCR) dipped by 3%, compared to the 6.7% increase in the previous quarter. Costs in the Outside Central Region rose at a slower pace of 1.9% than the 5.7% increase in the previous quarter.

This price increase of 0.4% is the slowest increment since the second quarter of 2020, according to Christine Sun, senior vice president of OrangeTee’s research and analytics. Sun added that softened prices were caused by new property curbs introduced in December and slower sales during the Chinese New Year lull. 

The Russia-Ukraine conflict also resulted in the market slowdown which was followed by inflationary pressures and supply disruptions.

For his part, Lee Sze Teck, senior director of research in Huttons Asia said the December 2021 cooling measures affected the sluggish price hike in private property in the first quarter of 2022. 

Aside from the cooling measures, Wong Siew Ying, head of research and content of PropNex Realty, said dearth of new project launches, diminishing inventory of unsold suburban new houses, and surge of COVID-19 community infections caused by the more infectious Omicron variant that affected home viewings and dampened private resale market. 

But the firm also noted that the cost of private homes in 2022 is seen to stay firm and increase up to 3%, with the relaxation of border controls and construction costs increasing in the wake of the unrest between Russia and Ukraine.

Catherine He, head of research in Colliers International, said they expected the slower increase due to buyers taking a wait-and-see approach post-cooling measures and budget, as well as impending interest rate hikes.

Tricia Song, head of research in CBRE Southeast Asia, projected that the demand in the housing market is likely to remain relatively subdued in the second quarter of 2022 as buyers hold back on their purchases to reevaluate and understand the effect of the cooling measures.

The private residential market in 2022 is expected to be more subdued than last year, taking into consideration the cooling measures and expected interest hikes, Leonard Tay, head of research in Knight Frank Singapore. Nevertheless, Tay said the underlying demand for private houses by owner-occupiers will remain strong, “contrasted against a shrinking inventory of saleable stock.

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