Singapore property prices, rents to rise in 2022, but at a slower

SINGAPORE — Property prices in Singapore have climbed in the past two years, and will likely keep going up despite the government’s efforts to cool the market, analysts and real estate agents told CNBC.

Private residential prices could rise between 1% to 3% in 2022, according to Leonard Tay, head of research at real estate agency Knight Frank Singapore.

JLL Singapore expects prices to increase by around 2% to 4% this year, said senior Director of Research and Consultancy, Ong Teck Hui.

That’s still a much slower rate than price increases last year, where private home prices jumped by 10.6% in 2021 compared to a year ago.

Prices of public housing flats on the resale market also popped 12.7% last year, data from the Housing and Development Board showed.

In a bid to cool the red-hot private and public residential property market, Singapore introduced new measures in mid-December. They included higher taxes on second and subsequent property purchases and tighter limits on loans.

The measures may have less impact on Singaporean citizens and permanent residents who are buying a home to live in, agents and analysts said.

Foreign buyers, however, appear to have been deterred by the new rules.

Trisni Djohari, a PropNex real estate agent whose clients mostly come from Indonesia, said she used to receive around 10 to 12 enquiries a month.

But she said she only received one enquiry since the cooling measures were announced in mid-December until the time she spoke to CNBC in late January.

“Most of them state that now they have to think twice [before they] buy property in Singapore,” she said.

Additional buyer’s stamp duty for foreigners was raised to 30% from 20% before. ABSD is a tax that is levied on buyers of Singapore residential properties. It is calculated based on one’s residency status, citizenship and the number of residential properties the person owns in Singapore.

Entities such as property developers also need to pay ABSD when they purchase residential property, which was raised to 35% under the new rules.

JLL’s Ong said the volume of transactions in the private residential market fell 20% in the second half of December after the cooling measures were introduced, compared to the first half of that month.

Market watchers expect the effect of the cooling measures to last around two to three quarters.

“Volumes and prices are expected to show tentativeness in Q1 and perhaps Q2 2022 before underlying fundamentals kick in to re-establish homebuying demand,” Tay of Knight Frank said in an email.