Locals, permanent residents’ income hike to impact private homes prices: Savills

A study showed that Singaporean’s salaries will increase 3.5% in 2022.

There will likely be an increase in private home prices next year as the spending will be adjusted depending on the hike in Singaporean residents’ income, property firm, Savills, revealed.

“As the income of both locals and Singapore permanent residents (PRs) increase, prices would follow suit,” said Savills in its report.

“These buyers’ purchasing power can be independent from the performance of the economy,” it added.

Savills also pointed out that the extended time gap from previous launch in the market to the fresh launches this year meant that the limited buyers were replenished by new citizens, Singapore PRs, and Singaporeans, who had upgraded their financial status during that gap.

They also see no oversupply of land happening and even if there was, Savills said it can be easily resolved in a few quarters if few or no sites are open for sale.

“Therefore, if nothing interrupts this process, price increases should continue. This situation is likely to exist as the authorities continually calibrate land sales so that the completed units will end up within occupancy levels that are range bound for an orderly functioning market,” said Savills.

Prices up as inflation simmers

But the rate of price increase will be moderate in 2023, Savills said. 

In its projections, Savills said year-on-year increase for 2022 is 7% whilst 2023 will post 2.4% increase if inflation simmers down.

“We believe that prices are moving up  because there has been a significant decline in  new launches this year and the launches are in  locations that had not seen significant project releases for over two years,” Savills said.