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Singapore’s property market faces lull amid festivities but expected to come ‘roaring back’: Huttons

The Edge Singapore
·4-min read


Speakers at the webinar included (clockwise from top left): Bernard Tong, CEO, EdgeProp Singapore; Mark Yip, CEO, Huttons; Shermie Tee ; vice-president agency sales & training, EdgeProp; and Kevin Geow, executive group district director, Huttons (Credit: The Edge Singapore)

SINGAPORE (EDGEPROP) - Even though the real estate market has been slower over December and January, sales momentum is expected to pick up again. “Traditionally at the end and at the start of the year, because of the festive [season], usually the [real estate] transaction volumes [will be] low,” says Kevin Geow, executive group district director, Huttons. The lack of major new project launches is also another factor, on top of the start of the school year as students return to school, explains Geow.

However, sales numbers are expected to be “roaring back”, says Mark Yip, CEO, Huttons, who was speaking in a webinar hosted by EdgeProp Singapore on Jan 22. “Because there are only about 6,000 to 7,000 new launches in the pipeline, those who have not gotten a unit in 2021 will probably do so in 2022; interest rates will still remain, hovering around 1.5 to 2% for those marginal buyers,” says Yip. (Browse newly launched condos in Singapore right now)

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Overall, Geow still sees a “significant” jump in appointment numbers despite the recent property cooling measures.

What will investors do?

To control home prices amid a rising concert of prices running ahead of economic fundamentals, the Singapore government announced new curbs that took effect from Dec 16.

The Additional Buyer’s Stamp Duty (ABSD) for homeowners who purchase a second home and onwards have been raised by 5% to 15%, depending on the number of properties a homeowner already owns. On top of that, the Total Debt Servicing Ratio (TDSR) has been tightened further from 60% to 55% while the Loan-to-value ratios (LTV) for HDB loans have been reduced from 90% to 85%. (Find HDB flats for rent or sale with our Singapore HDB directory)

On the back of this, “everyone will be thinking what [and how] it is going to affect the market,” says Geow. Ultimately, he believes it is about “the mindset and philosophy of these investors”. “Some investors will choose to wait until the dust has settled whereas other investors will also [how] these two quarters [can] serve as a window of opportunity for them to start coming into the market to look at who are the more genuine sellers,” says Geow.

“Personally, I do see this [as a] positive. And I do see this as a window of opportunity for the next two quarters. This is because for sellers, no matter how bullish they want to be, they have to be realistic in the selling price. So I do see this as a good opportunity to come to the market,” he explains.


In December, Shun Tak Holdings withdrew from the collective sale deal for High Point condominium (Credit: Albert Chua/ The Edge Singapore)

En bloc market sentiment

Market sentiments on the ground will also impact the en bloc market. In December, Hong Kong-listed Shun Tak Holdings withdrew from the collective sale deal for High Point condominium, forfeiting its $1 million tender deposit. This came less than a month after it announced the acquisition, sowing uncertainty in the market on how future en bloc deals would fare.

On that note, Yip compares developers’ dependence on the en bloc market as needing “flour to make bread”. “Of course, with this new increase in ABSD, developers become more prudent”, he adds.

Under new regulations, developers acquiring residential properties must pay 35% ABSD — up from 25% — if they cannot sell all their units in five years. There is also an additional non-remittable 5% ABSD for developers.

“There’s still a demand because I foresee that this year is also a year for developers to replenish their land bank, because looking at the depleting stocks, and looking at the demand coming in, and where the borders do open, more investment and money will come into Singapore,” says Yip.

Developers have two avenues to ramp up their landbank — the en bloc market and through government land sales. In one of the two government land sale tenders that closed this month, eight bidders had competed for a 99-year leasehold residential site at Jalan Tembusu near the East Coast, with Singapore-listed property group City Developments (CDL) emerging as the top bidder for the land, at $768 million or $1,302 psf per plot ratio (ppr). (See potential condos with en bloc calculator)

“[Developers] have to be very highly selective on what they really buy and to assess the risk, whether it is still worthwhile to do so,” remarks Geow.

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