Will Singapore’s property prices fall this year? What the data tells us
Will Singapore’s property prices fall this year? What the data tells us. During a 2022 property outlook webinar co-hosted by EdgeProp Singapore and Huttons Asia on January 22, attendees asked questions about various aspects of the property market and what to expect in the coming months, particularly in light of the Singapore government’s new property cooling measures announced last December.
Given the current uncertainties, Edgeprop CEO Bernard Tong believes it is critical for property owners, investors, and other market participants to consider past trends and historical data, which can often provide clues and insight into how the market may react in the current situation.
As a panelist for the webinar, Tong spoke in depth about the tools available on EdgeProp’s platform that can help users distill data from portals like URA Realis and HDB into practical and digestible pieces that users can use to answer some pressing questions about the property market outlook.
How will cooling measures affect property prices?
A key question raised by several webinar participants was how residential property prices will play out following a stellar year for the market in 2021 and the implementation of the new measures.
Tong used the EdgeProp Market Trends tool to answer this question, which allows users to see at a glance how property prices and volumes have historically moved on a monthly, quarterly, or yearly basis. Data can be filtered using the free tool in a variety of ways, including asset class, transaction type, project name or street address, and property size.
Tong used the tool to examine two previous instances in which the property market was subjected to external shocks: the previous round of cooling measures, which went into effect in July 2018, and the onset of the pandemic in the first half of 2020. The previous round of cooling measures occurred in July 2018, when additional buyer’s stamp duty (ABSD) rates were raised, requiring Singaporeans to pay ABSD of 12% on second properties, up from 7% previously. Furthermore, loan-to-value limits were reduced by five percentage points.
Following the implementation of new regulations, transaction volumes for private non-landed properties fell 68.5 percent, from 1,486 in July 2018 to 467 in August 2018. The average psf price fell more subtly, from $1,530 in July 2018 to $1,482 the following month. Following the m-o-m drop, both average psf prices and transaction volumes recovered and resumed their upward trend eight months after the measures were tightened.
Following the onset of the Covid-19 pandemic, which saw prices and transaction volumes of private non-landed property plummet in April 2020 during Singapore’s “circuit breaker” period, the market demonstrated a similar resilience. Nonetheless, the market saw a significant increase by June 2020 before fully recovering to a yearly high in terms of psf prices and volumes.
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