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Landed home sales hit record high of $8.9 bil in 2021: Knight Frank

·2-min read

Credit: Samuel Isaac Chua/The Edge Singapore

SINGAPORE (EDGEPROP) - According to a research report by Knight Frank, $4.3 billion worth of landed homes were transacted in 2H2021 with 421 units changing hands, representing a 6.2% decline in total sales value on a half-yearly basis.

Nonetheless, this brings the total value of landed home transactions in 2021 to $8.9 billion, marking an all-time high.

Based on flash estimates released by URA, the Property Price Index (PPI) for landed homes expanded by 3.7% q-o-q in 4Q2021, bringing the total price index change for the whole year to a robust 13.1%.

Knight Frank notes that despite increased additional buyer’s stamp duty (ABSD) rates effective from Dec 16, 2021, the impact on the landed market is likely to be marginal.

“The stock of landed houses has remained stable and relatively unchanged for more than 25 years – accounting for just 19.3% of the whole private residential market today based on URA’s 3Q2021 data – a scarce residential asset class in high-rise Singapore. These homes are considered a secure source of investment,” the report reads.

Within the landed housing market, Knight Frank points out that Good Class Bungalows (GCBs) contributed significantly to sales in 2021. In 2H2021, the GCB market recorded an estimated sales value totalling $751.4 million.

Looking ahead, Knight Frank expects the landed residential market to continue drawing strong interest in 2022. “Even though sales volume is projected to move at a more moderate pace as much of the saleable landed homes supply was taken up in 2021, housing prices in the landed residential market are expected to increase by some 5% for the whole of 2022,” the report reads.

Meanwhile, sales of prime non-landed properties - which Knight Frank defines as units with a floor area of at least 2,500 sq ft and located within Districts 1, 2, 4, 9, 10 and 11 - eased to $1.9 billion in 2H2021 with 225 units transacted. This represents a half-yearly decline of about 9% in total sales value.

District 10 remained the top location of choice, recording 103 sales within this prime region. The transaction of units within the Les Maisons Nassim development led sales performance in the second half of the year, with a penthouse unit and a first-floor unit sold for $75 million and $35 million respectively.

Knight Frank views that the recent 10% hike in ABSD for foreign buyers purchasing any residential properties has affected the nascent recovery of the housing market in the Core Central Region.

However, the sales performance of luxury homes in the year ahead is expected to improve with the opening of Singapore’s borders. “The establishment of more Vaccinated Travel Lanes and extension of current ones should draw some of the globally mobile wealthy who are still prepared to pay the 30% ABSD for entry into Singapore’s stable prime residential market,” the report states.

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