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S'pore residential properties to see persistent price growth, tapering supply and rising interest in 2022: PropertyGuru – Singapore News

“Homeowners are advised to be cautious about taking on significant new debts and pay notice to the changing economic scenarios that are playing out.” — Paul Wee, PropertyGuru Singapore Vice President

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Singapore — Singapore’s residential property sector is expected to see persistent price growth, tapering supply and increasing interest rates in 2022, said popular property website PropertyGuru.

The property sector has displayed incredible resilience in the face of the Covid-19 pandemic but may need to contend with developing macroeconomic and property supply trends in 2022, said the website in its annual report of the country’s property market outlook.

Key highlights of the report include rising property prices, a decreasing supply of private housing and a gradual increase in interest rates.

It was reported that the tightened Covid-19 safety measures imposed had a limited impact on the “appetite for residential property, with prices rising for the sixth consecutive quarter.”

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This sustained growth is likely to persist in 2022, albeit at a slower pace, said PropertyGuru.

In 2022, another estimated 31,000 Housing and Development Board (HDB) flats will exit their minimum occupation period.

Meanwhile, only 11 new projects are anticipated in 2022. “Hence, there was a slight buzz in the collective sales scene.”

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As of the third quarter of 2021, about 25 new en bloc sites were put up for tender, compared to only 11 in 2020.

“How many are eventually sold will determine the supply for the next few years,” the website noted.

There are eight projects located in the outside central region, including two executive condominiums and three mega-developments with large land sites, such as those in Marina View and Jalan Anak Bukit.

PropertyGuru also noted that rising global interest rates would inevitably result in a gradual increase in Singapore mortgage rates, despite a booming property market caused by increased access to affordable credit.

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“Interest rates may rise in the longer term but are likely to remain low in the short- to medium-term,” said PropertyGuru Singapore Vice President Paul Wee.

Potential implementation of wealth tax

PropertyGuru highlighted that there had been discussions about wealth taxes in response to observations of a growing disparity in wealth.

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“The government has said that they agree to wealth tax in principle,” and if imposed, it will be around 2022 or 2023.

The current challenge is imposing the tax over a range of assets, including property, and ensuring to drive it fairly and equitably.

Nonetheless, PropertyGuru deems the outlook for next year to be positive, with home prices expected to continue being robust and demand to remain resilient as it is driven by HDB upgraders and wealthy Singaporeans.

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More foreign buyers will also enter the market should more Vaccinated Travel Lanes (VTLs) be rolled out as planned.

“If you look at what’s bolstering the market, it is the new rich,” said PropertyGuru Singapore Country Manager Tan Tee Khoon. “They are buying in higher quantum, diverting their wealth into luxury real estate for better capital appreciation.”

A few examples of high-profile buyers include chief executive of gaming tech company Razer, Tan Min-Liang; the chief executive of gaming chair company SecretLab, Ian Ang; and the wife of Grab’s co-founder, Chloe Tong./TISG

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Read related: Property prices are showing signs of slowing down: Property Guru

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