Property trends Singapore 2022: 5 market trend predictions

Clara Lim

24 December, 2021

Following a trend that began last year at the start of the Covid-19 pandemic, Singapore’s property market boomed all through 2021.

According to Minister for National Development Desmond Lee, private housing prices rose by 9% since Q1 2020, while HDB resale flat prices rose by 15% in the same period. That’s a pretty strong showing considering that there is still no end in sight for Covid-19. (Like a bad movie series, it keeps churning out instalment after instalment…)

With the new cooling measures announced, will the property market do an about-turn? Here’s our take on what’s in store in 2022.

Why did Singapore’s property market do so well in 2021?

2021’s upward spiral of property prices can be described as a perfect storm of multiple converging factors.

First, there is the strong local demand for housing as millennial couples look to buy their first homes. But with BTO flats delayed due to border closures, the YOLO generation is turning to HDB resale flats instead, driving resale prices up.

Cashing in on surging HDB resale prices, HDB dwellers took the opportunity to sell their homes at a profit and upgrade to larger, better-located HDB flats or private condominiums. At the same time, foreign investors poured money into the safe haven that is Singapore’s property market, driving demand up for luxury properties.

The cherry on top? Low mortgage interest rates, which make purchasing property even more attractive than before.

What are the new cooling measures — will they work?

With a property market threatening to spin out of control, it’s no wonder that the government got increasingly anxious towards the end of 2021.

We started seeing signs of this back in October when HDB announced a new Prime Location Housing Model to discourage house flippers from balloting for centrally-located BTO flats.

Then, on 16 December 2021, MND announced a spate of property cooling measures to keep housing affordable for Singaporeans:

  • Higher Additional Buyer’s Stamp Duty (ABSD) across the board, except for Singapore citizens and PRs buying their first property
  • Total Debt Servicing Ratio (TDSR) threshold tightened from 60% to 55%, including refinancing existing home loans
  • HDB loan minimum downpayment increased from 10% to 15%

The question is: what will these cooling measures mean for the property market in 2022? Here are five of our predictions.

1. More housing options for owner-occupiers

The cooling measures are meant to level the playing field for the average Singaporean — the genuine homeowner who just wants an affordable place to live in. Sounds like you, right? Not only are you off the hook for most of the cooling measures, but you also stand to gain the most from them.

If the cooling measures work, they should reduce the red-hot demand for HDB resale flats, making them more affordable to first-timers and upgraders. In addition, MND announced a 35% increase in BTO flat supply, from 17,000 in 2021 to 23,000 in 2022.

With hopefully more affordable HDB resale flats and more BTO flats to ballot for, that means 2022 should deliver more public housing options for regular people.

But first-time homebuyers should be aware of the increased downpayment for an HDB housing loan from 10% to 15%. For those who don’t have much cash or CPF savings, the sizeable jump might necessitate more time or discipline in saving up for your first home.

2. HDB resale market to remain robust

Despite the increase in BTO supply, a sizeable chunk of Singaporeans will probably still opt for HDB resale flats, keeping the resale market buoyant.

That’s because construction delays are not likely to go away in 2022. With Covid-19 still hanging around like a party guest that’s outstayed its welcome, it looks like the construction sector’s manpower crunch and resulting delays may persist well into next year.

So, HDB resale flats will continue to be popular with first-time homebuyers impatient to move in as well as families looking to upgrade from their starter HDB flats after completing the Minimum Occupation Period.

With the buzz around the new Prime Location Housing Model, there is likely to be even greater interest in city-fringe HDB resale flats that are close to the ‘prime zones’ but avoid the higher MOP requirements — think Toa Payoh and Bishan.

Read more at: https://www.99.co/singapore/insider/...y-trends-2022/