Huttons' comments on URA and HDB 2Q 2022 numbers | Huttons Group

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Huttons’ comments on URA and HDB 2Q 2022 numbers

Huttons Research


Private home prices increased by 3.5% in 2Q 2022, significantly faster than 1Q 2022’s 0.7%. In 1H 2022, private home prices were up by 4.2%. The stronger price gains were due to new launches, strong demand for homes and the return of foreigners.
Developers launched 1,956 units for sale in 2Q 2022, more than 3 times the units launched for sale in 1Q 2022.
The launch of 2 major projects – Piccadilly Grand and LIV @ MB pushed up the overall sales in 2Q 2022 to 2,397 units, 31.3% higher than the previous quarter. Both projects which are located in the Rest of Central Region (RCR) were well-received by buyers and sold more than 70% of its units on launch day. They likely contributed to the price gains of 6.4% in the RCR in 2Q 2022.
Based on caveats lodged, there were 296 purchases by foreigners in 2Q 2022, an increase of more than 100% over 1Q 2022’s 147 purchases. The opening of borders to vaccinated travellers gave a boost to sales for projects in the CCR and RCR. 592 homes in the CCR were sold in 2Q 2022, 64% higher than 1Q 2022.
Rents of private residential properties picked up pace in 2Q 2022. Rents shot up by 6.7% in 2Q 2022, the fastest quarter on quarter increase since 4Q 2007. Landlords are raising rents to cover the increase in interest costs.
The number of unsold units increased by 12% in 2Q 2022 to 16,079 as developers obtained permission for their projects to be launched in the next 12 months.
Executive Condominiums
Developers sold 193 EC units in 2Q 2022. As of 22 Jul, North Gaia remains the only EC project with units for sale in the market until the next two EC launches, Copen Grand in Tengah and Tenet in Tampines in 4Q 2022.
Based on advance estimates, Singapore’s economy grew 4.8% on a year-on-year basis in 2Q 2022. The manufacturing and services sectors recorded similar growth to 1Q 2022 but construction activity picked up strongly, growing 3.8% in 2Q 2022 compared to 1.8% in 1Q 2022. The Ministry of Trade and Industry estimates the economy to expand by 3% to 5% in 2022.
The upcoming launches in 3Q 2022 are all located in the Outside Central Region. AMO Residence will be launch for sale on 23 July. The overwhelming interest should translate into healthy sales.
This will be followed by K Suites, Kovan Jewel, Lentor Modern, Sky Eden @ Bedok and The Arden. Sky Eden @ Bedok is the first launch in Bedok Town Centre in 10 years. Lentor Modern will be the one and only integrated mixed-use development in the new Lentor precinct.
These projects will drive price gains in 3Q 2022. Foreigners are continuing to buy homes in Singapore and will support prices in the Core Central Region and Rest of Central Region. The strong demand from HDB upgraders will translate to robust sales in the Outside Central Region. Developer sales are forecasted to be around 9,000 units and private home prices are expected to increase up to 8% in 2022.
HDB resale prices increased by 2.8% in 2Q 2022. In 1H 2022, HDB resale prices have increased by 5.3%. Compared to quarterly price gains of around 3% in 2021, the price gains in 2022 has stabilised to around 2.6%.
Transaction activities tend to pick up in 2Q after the first quarter lull but instead resale flat transactions have eased by 1.7% in 2Q 2022 to 6,819. This is the third quarter of decline and points to signs of the market losing momentum. It is also the lowest quarterly sales since the circuit breaker in 2Q 2020.
More buyers are resisting paying higher prices for a resale flat. It was observed that there is an increasing number of resale flats whose transacted price matches the valuation price, leading to zero cash over valuation. Some buyers may have applied for BTO flats at Yishun which has a shorter construction period or tried their luck at May 2022’s SBF exercise.
The trend of million-dollar flats showed no signs of abating. They made up more than 1% of total resale flat transactions and could exceed 300 in 2022. There may be more larger flats in non-mature estates breaching the million dollar mark in the months ahead.
HDB resale flat prices should trend towards more stability for 2H 2022. Rising interest rates and more affordable BTO flats with a shorter construction period will divert some demand away from the resale market. Furthermore buyers of a BTO flat will enjoy deferred payment till key collection which will allow buyers to tide over the current high interest rate environment. Huttons expect HDB resale prices to increase up to 10% in 2022.