Property market in Singapore remains ‘in balance’: RHB

The boost from the economy’s reopening is offset by the risks from the Russia-Ukraine conflict.

The property market in Singapore remains in balance as the reopening of the economy and limited inventory levels are offset by risks of rising interest rates, higher taxes and worsening macro landscape caused by the Russia-Ukraine conflict, banking firm, RHB, said.

In its report, the RHB cited the Urban Redevelopment Authority’s figures where the private residential property index in Singapore rose by 0.4% in the first quarter of 2022 compared to the 5% rise in the fourth quarter of 2021.

Non-landed property prices, meanwhile, went down 0.6% QoQ, marking its first decline since the first quarter of 2020.

“The decline in non-landed property prices was led by rest of central region (RCR), mid-tier, where prices fell 3% QoQ, followed by the core central region (-0.5%) while prices in the mass market segment rose 1.9%,” said RHB.

On the other hand, the landed property segment recorded a 4% jump in the first quarter of 2022 after a 13.3% rise last year due to the continued high demand for larger independent spaces. 

Whilst the latest reopening measures and easing of border restrictions are likely to speed up investor confidence and revive demand from foreign buyers, RHB said it does not expect these factors to be significant and cause any upward pressure on prices.

New private home sales, except executive condominiums, have fallen 47% year-on-year in the first two months of 2022 caused by lack of new launch supply and cooling measures impact.

RHB also noted that volumes in March are also expected to be lower by 40% year-on-year due to lack of big new launches. 

In 2022, RHB sees primary sales volumes to go down 30% to 40% to 8,000 to 9,000 units on the back of a lower launch pipeline and cooling measures.