_Prime Non-Landed and Landed Residential Market Update H1 2022

Key Highlights

Prime Non-Landed Residential

• Luxury non-landed sales in the first half of 2022 eased to S$1.1 billion with a total of 125 units sold, a half-yearly decline of some 43.7% in total sale value from H2 2021.
• The first quarter of 2022 recorded a steep decline in prime non-landed sales due to the Additional Buyers’ Stamp Duty (ABSD) hikes on foreign buyers imposed in the cooling measures announced in December 2021, with total sale value in Q1 2022 declining by some 50.6% q-o-q to S$460.7 million with 50 units sold.
• However, sentiments started to improve in Q2 2022 as investors searched for safe havens in an uncertain world, and as the opening of borders heralded a return in foreign interest.
• The global pandemic has created a premium on stability in an uncertain world, and the globally mobile wealthy may still be prepared to pay the 30% ABSD as a premium for entry. Given the amount of anecdotal interest and enquiries from potential foreign homebuyers, luxury non-landed homes, especially fully-furnished larger-sized units ready for immediate occupation, will remain strong with more sales in 2022 as cross-border travel increases to pre-pandemic levels.

Landed Residential

• Based on flash estimates released by URA, the Property Price Index (PPI) for landed homes rose a further 2.9% in Q2 2022, bringing the total increase to 7.3% in the first half of 2022.
• A total of S$2.9 billion worth of landed homes was transacted in H1 2022, a 46.9% half-yearly decline from the S$5.4 billion recorded in the last six months of 2021.
• Within the landed housing market, sales in Good Class Bungalows (GCB) dampened after a similar bumper year in 2021. The GCB market recorded S$343.4 million in sales value in H1 2022, a 55.3% half-yearly decline from H2 2021.
• A steady rise in affluence, organic growth of the local wealth population and new citizens are expected to contribute to the pool of buyers for landed homes. To exacerbate limited supply in the market, construction costs has sky-rocketed, and consequently the overall cost and time needed to build landed homes.