Huttons’ comments on URA and HDB numbers

Gains in property prices picked up pace in 3Q 2021 to 1.1%. For the first nine months of 2021, private property prices have risen by 5.3%. Private property prices have appreciated by 8.3% since the circuit breaker in 2Q 2020, 21% from the bottom in 2Q 2017 and are now 6.9% above the previous peak in 3Q 2013.

The landed market drew keen interest in 3Q 2021. In the Good Class Bungalow (GCB) area, an estimated 23 deals were sealed in 3Q 2021, taking the year-to-date tally to 79. Several large quantum deals along Cluny Road, Queen Astrid Park and Bishopsgate were sealed in the quarter.

Despite launching less projects and units for sale in 3Q 2021, developers sold 3,550 units, the highest quarterly sales since 2Q 2013. Strong sales were seen at the first two mass market launches of 2021, Pasir Ris 8 and The Watergardens at Canberra. The buying demand was driven in part by the robust HDB resale market where upgraders took the opportunity to upgrade.

Despite the lower number of launches in the CCR in 3Q 2021, sales in the CCR remained healthy. The luxury segment was abuzz with activities. The Ultra-high-net-worth individuals (UHNWIs) scooped up large floor plate units in projects like Les Maisons Nassim, Le Nouvel Ardmore and Eden Residences Capitol. Singapore is widely regarded as a safe haven in times of uncertainty.

The level of subsales has risen a fair bit in recent quarters although still below levels in the past. It may be a cause for concern as it may signal financial distress in the sellers.

Developers have sold 10,009 units in the first nine months of 2021. This is 0.3% higher than 9,982 units sold in the whole of 2020. The market will probably see more than 12,000 new sales in 2021, the highest level since 2013.

Private property prices are estimated to increase between 6% and 6.5% in 2021. The luxury market may get a boost when more Vaccinated Travel Lanes are set-up and foreigners are able to travel to Singapore. Strong global economic recovery, opening up of borders, high vaccination rate and stable political environment in Singapore are supportive of a growth environment.

HDB resale prices rose by 2.9% in 3Q 2021, moderating from 2Q 2021’s 3.0%. For the first nine months of 2021, HDB resale prices have risen by 9.1%. HDB resale prices have appreciated by 14.2% from the circuit breaker in 2Q 2020, 15.1% from the bottom in 2Q 2019 and are now 0.8% above the previous peak in 2Q 2013.

The pace of price gains has probably peaked as buyers resist paying higher prices for resale flats. Nevertheless, demand for flats stayed strong in 3Q 2021 as volume increased 19.4% from the previous quarter. Buyers are entering the resale market to satisfy their urgent need for a home.

Construction delays are constricting new supply of resale flats for sale because the existing owners are not able to move to their new place. Construction delays may take some time to ease although workers can return to their workplace if they test negative via an ART.

If the bottleneck in completion of BTO flats is not eased, the tight supply of resale flats for sale will not be resolved no matter how many BTO flats HDB plan to build in 2022.

Transaction volume for the whole of 2021 is estimated to be between 29,000 and 30,000 flats. Prices may increase by another 2% to 2.5% in 4Q 2021, bringing the price gains for the whole year to more than 11%, the largest gains since 2010.