Q1 2021 Singapore Property Update: Is a Cooling Measure Coming Soon?

2021 Singapore Private property prices post steepest quarterly rise in almost 3 years: URA flash estimates

In 2021, Singapore Private property prices have posted a full year of quarterly increases after rising 2.9 per cent in the first quarter of 2021 from the fourth quarter of last year — the steepest jump since the second quarter of 2018. Prices had gained 2.1 per cent in the fourth quarter.

This is due to costlier city-fringe homes and a strong market for landed homes. Prices of private homes were driven up largely in the city-fringe areas, where they rose 6.1 per cent, quarter on quarter. 

Year on year, private home prices have risen by 6.2 per cent, with most of the increase – over 5 per cent – taking place over the last two quarters, analysts said.

Analysts said the Urban Redevelopment Authority (URA) flash estimates  released on Thursday (April 1), indicate that the price rises were driven by sales in non-prime areas.

Private property prices in prime areas recorded a fall owing to the lack of foreign buyers due to Covid-19 travel restrictions, they added.

Property analysts say that prices for private housing will continue to rise as more HDB dwellers look to sell their flats for an upgrade. A potential influx of foreigners as vaccination programmes are rolled out around the world may also lead to a surge in demand, they said.

HDB resale prices rise 2.8% in Q1, with 53 million-dollar flats sold

PPI vs HDB Price Index
Private Property Price Index vs HDB Resale Price Index

Housing Board resale prices rose for a fourth consecutive quarter, climbing 2.8 per cent in the first three months of this year over the previous quarter, according to HDB flash estimates released on Thursday (April 1).

Year on year, resale prices were up by 8 per cent.

Last quarter’s HDB resale prices are also just 5 per cent lower than their peak price recorded in the second quarter of 2013, said Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics.

At the current pace of price growth, a new peak may be formed by the second half of this year, she said.

Prior to their recovery from the second half of 2019, HDB resale prices had notched six straight years of decline from 2013 to 2018.

Citing HDB data, Ms Sun said average prices in the January to March period rose quarter on quarter in 22 of the 26 HDB towns. Toa Payoh (17 per cent, 244 units), Bukit Timah (11.2 per cent, 28 units) and Bedok (8 per cent, 402 units) posted the highest quarterly increases.

Ms Sun added that 2021 is likely to see a new record number of million-dollar HDB flats sold.

Fifty-three resale flats have changed hands for at least S$1 million in the first quarter, the highest quarterly sales of million-dollar flats on record, or since 1990, she said. This number has already surpassed the total number of million-dollar flats transacted in the years before 2018.

In addition, a sizeable number of HDB flats – more than 25,000 – will reach their five-year minimum occupation period this year, allowing them to be resold, she said.

“The potential injection of more resale flats into the market will help to stimulate demand, while transactions of newer flats – which tend to command a higher price – will prop up values,” said Ms Wong.

For the whole of 2021, PropNex forecasts that HDB resale prices could rise by 4 per cent to 5 per cent, barring any unforeseen events.

Mr Nicholas Mak, head of research and consultancy at ERA Realty, believes the growing demand in the HDB resale market was driven by construction delays and Build-to-Order (BTO) project launches being pushed back due to the pandemic.

This meant that people who had been looking to buy a new flat — which takes between three and four years to build — turned to the resale market instead.


Transactions for luxury condo in SG Singapore

Analysts said that the price rises were driven by sales of private properties in the rest of central region (RCR), which covers areas such as Chinatown, Tanjong Rhu and Boon Keng, which lie just outside the central core region (CCR).

The URA data showed that RCR prices jumped 6.1 per cent, compared to the 4.4 per cent rise in the previous quarter. In contrast, CCR prices fell marginally by 0.3 per cent, while those in the outside central region (OCR) — covering the rest of Singapore — increased by 0.9 per cent.

A lack of foreign buyers, coupled with a dearth of new housing projects, accounted for the marginal dip in CCR prices, analysts said.

The vaccination roll out and anticipated opening of borders in the coming year will probably push up demand again, he added.

“As we create more travel bubbles and once airlines start flying and the country opens itself up to foreigners, that would push the numbers up.

According to URA statistics and those from Orange Tee and Tie Research and Analytics, foreigners bought 1,005 non-landed private homes in the whole of 2019, compared to just 743 they purchased last year amid the pandemic.

Agreeing, Mr Nicholas Mak, head of research and consultancy at real estate firm ERA Singapore, said that he expects a further increase in private property prices as borders reopen.

Is Cool Measure Coming Soon?

Affinity at Serangoon Singapore top selling condominium

The sharp and continued rise in home prices has revived talk of whether property curbs may be around the corner to cool the private residential market.

Analysts said that the pace of growth in the public housing resale market is still sustainable.

Last quarter’s HDB resale prices are just 5 per cent lower than their peak in the second quarter of 2013, said Ms Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics.

Ms Wong Siew Ying, head of research and content at PropNex, said that this pace is “relatively sustainable“.

When it comes to cooling measures though, Ms Sun reckons the authorities may take other factors into context as well, such as whether price increases are outpacing the economic recovery, and whether price increases are seen across the board or remain localised in certain regions.

“Prior to its recovery from the second half of 2019, the HDB resale price index had notched six consecutive years of decline from 2013 to 2018,” she pointed out.

Precipitating the July 2018 round of cooling measures were four consecutive quarters of price increases totalling 9.1 per cent, as well as higher than expected Government Land Sales bids and record-high collective sale bids.

Mr Nicholas Mak, head of research and consultancy at ERA, said: “Construction is one of the sectors more adversely affected by the pandemic. Construction output contracted 35.9 per cent last year. If the Government were to introduce cooling measures, they would adversely affect the property market, which would in turn impact the construction industry. Subsequently, they would slow down the economic recovery.”

Similarly, Mr Mak expects the government is also tracking other indicators, such as developers’ sales volumes and the health of household balance sheets. At this point in time, he sees the implementation of cooling measures as premature as it could derail Singapore’s economic recovery, while the en bloc market – although showing signs of a revival – remains modest vis-a-vis the last en bloc boom.


Property Price Index for both Private Property and HDB are expected to continue to rise this year. However, the rate of increase is expected to be in accordance to economic growth. Prices may see the next increase jump when borders re-open and foreign buyers re-enter into Singapore Market. 

Cooling Measures are not expected as it will in turn affect construction and banking industry which will happen economic growth. Moreover, the government may take other factors into play.

The pick-up in the en bloc market is something the authorities are likely keeping a close watch on since aggressive bidding for land sites during the last en bloc cycle in 2017-2018 partly contributed to punitive cooling measures in July 2018. It’s worth noting however that the existing cooling measures, which included a hike in additional buyer’s stamp duty (ABSD), may well temper developers’ exuberance this time when it comes to bidding for land.

Keep to Learn More? Contact our Friendly Staff to find out more or a free 1-1 consultation here!

Share the Knowledge!

Leave a Reply

Your email address will not be published. Required fields are marked *