Singapore Property Market 2019 Review and 2020 Outlook
We will share with you the complete Singapore Property Market 2019 Review which covers HDB, Non-Landed private property and landed. We will then cover the 2020 Market outlook.
Singapore Property Market 2019 Review
2019 concluded the decade with some interesting data points.
Globally the MSCI World Index increasing by 24% and US S&P 500 logging a 29% gain while locally, the Straits Times Index (STI) only managed to churn out a 1.9% increase, staying below record highs. In contrast to stock market highs, slower economic growth prevailed in most major economies amidst growth challenges and lingering geopolitical issues.
As an open economy, Singapore was affected by global macroeconomic conditions, recording its slowest annual growth in GDP since the global financial crisis in 2009 at 0.7%.
Turning to Singapore’s property market, various stakeholders called for a recalibration of the cooling measures at various times throughout the year, but the policy stance remained that the cooling measures are achieving their desired goal of stability. Private condo resale prices rose by a rather mild 1.7% for the year, with transaction volumes well below the prior year and 24.6% below the 10-year average. While the resale market was tempered, condo sales by developers performed well, with new sales volumes 10.8% higher than in 2018. Similarly, in the landed resale market, a tepid 1.2% price growth was registered in 2019 but it marked the third consecutive year of rising prices (although volumes were below the 10-year average).
As for the HDB resale market, solid demand saw prices successfully reverse a six-year downward trend, rising a modest 0.4% on the highest volumes since 2012. Amongst other things, the high resale volumes reflected a solid supply of units reaching their minimum occupation period in the year.
Looking at a longer time horizon, over the decade from end 2009 to end 2019, resale prices for condo, HDB and landed have all increased considerably, reinforcing that Singapore residential properties are relatively safe, long-term investment assets:
| SRX Resale Price Indices | Price Growth in the 2010s | Price Growths in 2019 |
|---|---|---|
| Non-Landed Private | +58.9% | +1.7% |
| HDB | +19.1% | +0.4% |
| Landed | +81.1% | +1.2% |
Singapore Property Market 2019 Review: Non-Landed Private Resale Market
In 2019, the non-landed private (NLP) resale market has seen less activity, with total volumes down 27.4% from a year earlier. Compared to the past 10-year average, 2019 volumes were also lower by 24.6%. One of the reasons for the lower resale volume in 2019 was the slew of new launches, evidenced by the 10.8% increase in new sales volumes.
NLP resale price growth slowed in 2019, with the overall SRX NLP resale price index up 1.7%, compared to 7.7% growth in 2018 and a 6.2% increase in 2017. Across regions, OCR achieved the highest price growth at 2.3% in the year, followed by CCR at 1.5% and RCR at 0.6%. Over the decade from December 2009 to December 2019, the overall resale price index has risen by 58.9%.
NLP Resale Price Statistics
In 2019, the overall median transacted price for condo resale properties was $1.3 million at $1,201 psf. For each region, the median transacted prices were as follows:
| Region | CCR | RCR | OCR |
|---|---|---|---|
| Median Transacted Price | $2,372,500
($1,852 psf) | $1,500,000 ($1,353 psf) | $1,080,000 ($991 psf) |
Popular Areas
Among the planning areas, Jurong East (+24.7%), Downtown Core (+17.7%) and Sengkang (+16.2%) were the top performing areas in terms of percentage increases in resale volumes in 2019, when compared to 2018. Meanwhile, Sembawang (-53.9%), Kallang (-44.1%) and Hougang (-44.0%) incurred the largest drops in resale volumes in percentage terms.
Singapore Property Market 2019 Review: HDB Resale Market
Market Overview
After six consecutive years of year-on-year price declines, the HDB resale market finally showed signs of price stabilization with the resale price index recording a 0.4% increase at the end of 2019. One of the reasons for the improved resale price performance and demand can be attributed to lower BTO supply in 2019 (1,209 fewer or -7.7%). Year-on-year, mature estates prices declined by 1.4% while non-mature estates prices increased by 1.6%. Over the decade from December 2009 to December 2019, the overall resale price index has risen by 19.1%.
In terms of resale volumes, the 2019 total was 3.4% higher year-on-year, marking the fifth consecutive year of rising transaction activities. Compared to the 10-year average, 2019’s resale volumes were also slightly higher by 1.3%.
Popular areas
Among the HDB towns, Yishun (+38.4%), Bukit Panjang (+25.1%) and Geylang (+17.9%) were the top performing in terms of percentage increases in resale volumes in 2019, when compared to 2018. Meanwhile, Punggol (-24.6%), Marine Parade (-10.6%) and Queenstown (-9.9%) experienced the largest falls in volumes in percentage terms.
Singapore Property Market 2019 Review: Landed Resale Market
Market Overview
2019 marked the third consecutive year of rising prices for the landed resale market, following a 3-year downward trend from 2014 to 2016. In 2019, landed resale price grew 1.2% for the year, slower than 2018’s 7.3% and 2017’s 2.1%. Across regions, CCR achieved the highest price growth at 2.3% in the year and OCR logged a 0.8% gain while RCR prices decreased by 1.9%. Over the decade from Q4 2009 to Q4 2019, the overall resale quarterly price index has risen by 81.1%.
The 2019 landed resale market has seen some high-profile transactions especially for good class bungalows (GCB). In July 2019, a GCB at Nassim Road was transacted for $230 million, possibly the most expensive residential unit transacted ever, however, this transaction was not yet caveated as at the date of our data collection. In 2019, the overall landed resale volumes (1.379) lagged figures achieved in 2018 (2,076) as well as the past 10-year average (2,082) by close to 34%.
Landed resale price statistics
In 2019, the overall median transacted price for landed resale properties was $3 million at $2,526 psf on land area. For each region, the median transacted prices were as follows:
| Region | CCR | RCR | OCR |
|---|---|---|---|
| Median Transacted Price PSF Per Land Area | $5,710,000
($3,556 psf) | $3,000,000 ($12,237 psf) | $2,780,000 ($2,357 psf) |
Popular areas
In terms of regional distribution of resale transactions in 2019, 67.4% were in OCR, followed by 17.5% in RCR and 15.1% in CCR. The top three planning areas in terms of resale transaction volumes were Serangoon (258 records or 18.7% of total), Bedok (212 or 15.4%) and Bukit Timah (170 or 12.3%).
Singapore Property 2020 Market Outlook
Prior to the novel-coronavirus outbreak, the global economy was expected to grow at 2.5% in 2020, with Asia leading at 4.3% and Singapore GDP forecast to increase by up to 2.5%.
It’s likely that these forecasts will now be tempered somewhat, with a material short term reduction in China’s economic growth likely and a flow-on impact on other global economies. Aside from the flu-factor, which is yet to fully play out, the global growth outlook is relatively stable, with interest rate rises unlikely in the near term. There remains some event-risk on the downside, though most current risk factors (Brexit, Iran tensions, trade-wars) seem priced into the outlook already.
For the Singapore residential property market review, we see moderate price growth of around 3% for the year ahead. On the positive side, we see:
(i) mortgage affordability remaining stable or improving slightly, with SIBOR forecast to decline to 1.6% in 2020
(ii) land supply being held steady for H1 2020 (similar to 2019) and fewer new launches this year (estimated 28 in 2020 vs. 54 in 2019)
(iii) Singapore’s safe-haven status leading to incremental demand for residential real estate in the event of further regional and global uncertainty
(iv) the downside protection afforded by an easing of cooling measures.
On the negative side we see
(i) the pipeline of new launches is still significant, particularly if there is an easing of demand from overseas buyers
(ii) some risk to buyer confidence if the economic impact of the novel-coronavirus is more prolonged or deeper than expected or raises unemployment risk.
For the rental market, we see the potential for demand to surprise on the upside, with allocation of regional workforces likely to see an increased bias towards the relative safety and security of Singapore.
The outlook for the HDB resale market looks solid as recent policy changes such as the Enhanced CPF Housing Grant and higher income ceiling for buyers should continue to impact the market positively in 2020. A solid pipeline of flats reaching their minimum occupation period in 2020 will also support transaction volumes in the resale market throughout the year. A robust supply of up to 17,000 BTO flats are also expected to be released this year, reflecting the strong demand for housing. Overall, we expect HDB resale prices to track slightly higher than inflation for the yea
Growth of the Rest of Central Region
In the local context, properties in the Rest of Central Region (RCR) may benefit from the confluence of demand from various buyer groups, including
foreigners looking for a good buy, Singaporean investors, owner-occupiers who want to live closer to the city, as well as a sizeable pool of budget-conscious tenants who might be priced out of the prime rental market in the city centre.
For Singapore, strategic growth areas and infrastructural developments will augment the intrinsic locational advantage of city fringe properties. “In the coming year and decade, we foresee the positioning of RCR projects to change as upscale developments spill over from the Core Central Region (CCR) and its prime districts to the RCR,” said Tee Khoon.
For ageing precincts such as Beauty World and Rochor, it is foreseeable that new developments or redevelopments will provide much-needed booster shots to surrounding property value. This may give rise to a ripple effect that encourages developers to hop onto the rejuvenation bandwagon and buyers to give the area greater consideration.
Furthermore, rents in the RCR have been outperforming other regions since 2014, according to the URA Rental Index for non-landed properties, which makes the RCR appealing to property investors seeking rental yield.
In the course of the past decade, overall median psf prices of non-landed private properties in the RCR have increased 42 percent from S$1,035 psf in Q1 2010 to S$1,802 psf in Q3 2019 (above). “With the pace of rejuvenation of the built environment, there is likely further room for property value to increase in the RCR,” Tee Khoon noted. “The addition of new homes and amenities will create a virtuous cycle of rising value.”
In Q3 2019, the median RCR psf price was closer to the CCR price than OCR price, unlike at the beginning of the decade when the RCR psf price was closer to the OCR price than the CCR price (Figure 3a). The most recent RCR median psf price is buoyed by new launches just outside the CCR, such as Sky Everton (District 2) and Avenue South Residence (District 3).
Are RCR new launches a better deal than CCR resale?
Back in Q4 2016, it is likely that the average home buyer did not regard new sale, direct-from-developer RCR properties as being able to command a higher price than a resale CCR property (a median psf price of S$1,597 versus S$1,691 respectively.
In Q3 2019, however, the perception was turned on its head: new sale RCR properties commanded a median psf price that was higher than that of CCR resale homes (S$1,875 versus S$1,832).
“In 2019, a newly launched city fringe condo is, in the eyes of your typical buyer, seen as ‘more worth it’ than a resale property in the city or in a prime district,” explained Tee Khoon. New sales for projects such as Avenue South Residence and Park Colonial are pushing RCR median prices to new heights.
Another confirmation of RCR being the hive of development activity is the growing proportion of new launches in this region, which in the past four quarters accounted for roughly half (47.5 percent) of all new launches despite only occupying 15 percent of Singapore’s land area. Although the RCR may take a backseat to the CCR in 2020 in terms of the expected number of new residential projects, PropertyGuru foresees uptake for existing uncompleted RCR projects, such as Parc Esta and Jadescape, to continue at 2019 rates.
“What’s surprising about the newly launched residential units in the city fringe region is that, despite the price premium these homes are fetching, buyers are actually putting down their money,” Tee Khoon added. In the past four quarters, 48.5 percent of new launch private homes sold are from the RCR, reflecting a healthy uptake of developers’ new projects.
| Region | No. of Ppty launched | % private homes launched | Total new private homes | % new sales in region |
|---|---|---|---|---|
| CCR | 1,175 | 10.9 | 596 | 6.9 |
| RCR | 5,116 | 47.5 | 4,191 | 48.5 |
| OCR | 4,485 | 41.6 | 3,858 | 44.6 |
| All Regions | 10,776 | 100 | 8,645 | 100 |
Singapore’s original waterfront district is set to shine
Spanning the eastern coast of Singapore, District 15 is the city-state’s original waterfront district.
In Q3 2019, its asking price was S$1,673 psf compared to S$1,473 psf in Q4 2016—a growth of 15 percent. Compared with the rest of the districts in the RCR, District 15 ranks third after Districts 3 and 18.
With the Thomson-East Coast Line (TEL) set to open in stages in 2023 and 2024, we can expect rail accessibility to the city to increase property and land value of residential enclaves such as Tanjong Rhu, Amber and Telok Kurau, among others. Neighbouring District 16, with precints such as Bayshore and Sungei Bedok, will also benefit from upside.
With the Greater Southern Waterfront (GSW) areas still “subject to detailed planning”, it appears that Bayshore, which the URA has earmarked as a future “vibrant and sustainable garden neighbourhood”, could steal the limelight with potential new, futuristic high-rise waterfront homes.
Outside Central Region shows great promise
Infrastructural developments and improved amenities over the past decade have brought about staggering upside to homes in the Outside Central
Region (OCR), the largest and outermost region in Singapore. Comparing Q3 2019 to Q1 2010, the OCR has seen an 84 percent increase in median psf transaction prices for private homes (Figure 3a), beating RCR and CCR growth in percentage terms.
Value-wise, that is not to say the proverbial ship has sailed for the OCR. The region is still developing, with new neighbourhoods and towns such as Canberra and Tengah being built along with expanding estates such as Tampines, Yishun and Sengkang, where amenities are added and upgraded as their populations increase.
“The exemplary planning by Singapore authorities does not discriminate between regions,” said Tee Khoon. “The Cross Island Line, the Punggol Digital District and Woodlands Regional Centre are just some of the big projects to benefit OCR residents in the coming years and will contribute significantly to value upside for property.”
With the government’s plans, certain locations within the OCR may also see new rental demand. Aside from jobs being created in hubs such as the Punggol Digital District, rental demand may also spring from new MRT lines that give prospective tenants more options in terms of where to live. “With the new Thomson-East Coast Line line, for instance, previously inaccessible areas
like Springleaf in the north could appeal to expats,” Tee Khoon added.
In the OCR, the perks are not solely limited to investment upside from growth plans and improved connectivity. Encouraged by government policies and incentives as well as more spacious land plots in the OCR, developers have greater room to furnish innovative ideas and concepts for modern and sustainable ways of living that stand out from the rest. Bayshore, Lentor and Woodlands North are all yet- to-be-developed locations where this could happen, according to the latest URA Master Plan.
Core Central Region to retain prestige appeal
With no less than eight projects to be launched in the Core Central Region (CCR) in 2020, the performance of these will be a litmus test of consumer demand at the higher end of the price range. Quarterly figures in the past decade show that foreign buyers (including Permanent Residents) typically account for 30 to 35 percent of all property purchases in the CCR.
Meanwhile, PropertyGuru expects CCR real estate—99-year leasehold properties included—to gravitate towards the role of secure investment assets for both local and foreign buyers. “Decentralisation may shift supporting business functions out of the traditional downtown, but the CBD will remain the financial hub of Singapore for the foreseeable future, and the prestige of Core Central Region real estate will likely remain strong along with rental demand from high-earning professionals,” said Tee Khoon.
Within the CCR, the rise of District 7 (Bugis, Rochor, Beach Road) has seen its median psf asking price hit S$2,467 psf in Q3 2019, an all-time high for the district. Upscale projects in the pipeline—such as The M and an upcoming Tan Quee Lan Street project atop Bugis MRT—will add to the current stock, which includes Duo Residences, South Beach Residences and the 2019 launch Midtown Bay. In terms of asking price, District 7 could be poised to overtake District 9 in 2020 as Singapore’s most expensive district.
“Unlike the mostly freehold properties in Districts 9, 10 and 11, the upscale homes in District 7 mostly come at a lower price point as these are properties with a 99-year leasehold tenure,” Tee Khoon noted. “As the city expands outward, the sustained increase in land value and the upcoming North-South Corridor expressway will create new high-end buying opportunities in the CCR.”
Key Trends
Buoyant Foreign Buying to Continue
Buoyant Foreign Buying to ContinueThe Singapore luxury property market, which performed well above expectations in 2019, is likely to do the same next year as
new launches continue to hit the market. At the same time, intense competition among developers may curb price increases for higher-end properties.
“We will continue to see an inflow of foreign buyers in the Singapore luxury
market. Investors see Singapore as a safe and stable country for wealth preservation via real estate,” said Tee Khoon. “Compared to the likes of London, Sydney and New York, Singapore is also a relatively cheaper property destination.”
In the ultra-luxury property market (transactions in the price range of S$10 million and above), interest from Chinese national buyers is expected to continue.
New mature estate flats unlikely to dent resale demand
In 2019, the government has expressed clear plans to make Build-to-Order (BTO) public housing more readily available in mature estates, giving
first-time home buyers access to more affordable housing options within such estates. “Consumers who want to live in mature estates are typically limited to buying resale flats from the open market, which usually comes at a higher price point than BTO flats,” said Tee Khoon.
In the next five years, flat buyers can expect the Housing and Development Board (HDB) to launch and build more BTO flats in mature estates. The HDB has already revealed it will build around 5,000 BTO flats in the city-fringe location of Queenstown by 2027 and another 1,500 units in Bishan, an estate located within the RCR, by 2025.
As BTO flats are offered by the HDB at a lower-than-market rate, more BTO launches in mature estates could result in a slight price moderation of resale flats in the same estates. However, PropertyGuru does not expect demand for mature estate resale flats, especially those with good locational attributes, to fall. Supporting our view is the recently increased grant amount for resale flats, which gives sellers more leverage in their asking prices.
Additionally, the increase in income ceiling for BTO and EC homes will also bring about a new pool of demand. BTO flats in mature estates are likely to be multiple times oversubscribed, funneling first-time buyers into the resale market.
Macroeconomic concerns need to be answered
Despite many positives in the Singapore property market, possible headwinds in the form of muted economic growth and a possible US-China trade war could dampen home buying sentiment.
The Monetary Authority of Singapore (MAS) released a report in November 2019 advising home buyers to be more prudent in their purchasing decisions, on the back of an increasing number of unsold units and more new launches slated for 2020.
The MAS report also noted that property prices have moved more in line with economic fundamentals compared with the first half of last year following the additional cooling measures of July 2018. The number of housing loans, which rose in the past two quarters, are in line with the increase in transaction activity, while buyers’ financial leverage remains lower than the period before last year’s cooling measures kicked in.
Of greater concern is affordability of housing beyond HDB flats. “What needs to improve is wage growth, which should ideally keep up with property price increases to remain affordable for aspirational home buyers and facilitate upward mobility of Singaporeans upgrading from HDB flats to condos,” said Tee Khoon. Low wage growth, coupled with a tight loan-to-value (LTV) ratio, could also impact buyers’ ability to make downpayments and reduce affordability overall. However, it is not all gloom and doom. Interest rates are
seeing a downward trend and this is likely to continue in the mid- to long- term.
foreid possible headwinds, the affordability gap for private homes could further widen for Singaporeans.
Expected New Launches in 2020
| Launch Date | Project Name | District | Expected TOP | Units | Developer |
|---|---|---|---|---|---|
| Jan-2020 | Leedon Green | 10 | 2023 | 638 | MCL Land |
| Jan-2020 | The Avenir | 9 | 2025 | 376 | Hong Leong GuocoLand |
| Jan-2020 | Van Holland | 10 | 2023 | 69 | Koh Brothers |
| Feb-2020 | The M | 7 | 2024 | 522 | Wing Tai Asia |
| Feb 2020 | Parc Canberra (EC) | 27 | 2022 | 496 | Hoi Hup |
| Feb 2020 | Ola (EC) | 19 | 2026 | 548 | Evia |
| H2 2020 | 15 Holland Hill | 10 | 2024 | 59 | Kheng Leong |
| H2 2020 | 19 Nassim | 10 | 2023 | 101 | Keppel Land |
| H2 2020 | Cairnhill 16 | 9 | 2024 | 39 | Tiong Seng Ocean Sky |
| H2 2020 | Dalvey Haus | 10 | 2024 | 27 | KOP |
| March-2020 | Forett@Bukit Timah | 21 | 2024 | 669 | Qingjian Realty |
| H2 2020 | Grange 1866 | 10 | 2024 | 60 | Heeton Holdings |
| H2 2020 | Hyll on Holland | 10 | 2024 | 319 | Far East Org |
| H2 2020 | Katong Park Towers | 15 | 2024 | 117 | Bukit Sembawang |
| H2 2020 | KI Residences @ Brookvale | 21 | 2023 | 660 | Hoi Hup & Sunway |
| March-2020 | Kopar at Newton | 11 | 2024 | 435 | Chip Eng Seng |
| H2 2020 | Noma | 14 | 2024 | 39 | Macly Group |
| H2 2020 | Normanton Park | 5 | 2024 | 1862 | Kingsford |
| H2 2020 | Peak Residence | 11 | 2024 | 90 | Tuan Sing |
| March-2020 | Tedge | 14 | 2024 | 42 | Macly Group |
| H2 2020 | The Landmark | 3 | 2024 | 396 | ZACD & MCC |
| H2 2020 | Linq @ Beauty World | 21 | 2024 | 120 | BBR Holdings |
| H2 2020 | Vanilla | 15 | 2024 | 60 | Melville |
| H2 2020 | Verdale | 21 | 2025 | 258 | SOHL & CSC |
| H2 2020 | Verticus | 12 | 2025 | 162 | Soilbuild |
| H2 2020 | Penrose | 14 | 2024 | 680 | Hong Leong |
| H2 2020 | Tan Quee Lan Residences | 7 | 2025 | 585 | GuocoLand Hong Leong |