Credit: Samuel Isaac Chua/The Edge Singapore
SINGAPORE (EDGEPROP) – According to a Knight Frank research report, $4.3 billion worth of landed houses were traded as of 2H2021 with 421 units changing hands, representing a 6.2% drop in the total value of landed houses. sales on a semi-annual basis.
Nonetheless, this brings the total value of landed housing transactions in 2021 to $8.9 billion, marking a record high.
Based on flash estimates published by the URA, the house price index (PII) for landed houses increased by 3.7% quarter on quarter in 4Q2021, bringing the total change in the index for prices for the whole year at 13.1%.
Knight Frank notes that despite the increase in Buyer’s Supplementary Stamp Duty (ABSD) rates effective December 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 – now representing only 19.3% of the entire private residential market based on URA data as of Q3 2021 – a rare residential asset class in Singapore’s skyscrapers. These homes are considered a safe source of investment,” the report says.
In the landed housing market, Knight Frank points out that Good Class Bungalows (GCBs) contributed significantly to sales in 2021. As of 2H2021, the GCB market recorded an estimated sales value of $751.4 million.
Looking ahead, Knight Frank expects the landed residential market to continue to see strong interest in 2022. The landed residential market is expected to grow by around 5% for the whole of 2022,” the report states.
Meanwhile, sales of prime non-land properties — which Knight Frank defines as units at least 2,500 square feet in size and located in Districts 1, 2, 4, 9, 10 and 11 — declined to $1.9 billion in 2H2021 with 225 units traded. This represents a six-month decline of around 9% in total sales value.
District 10 remained the top location of choice, registering 103 sales in this region of choice. The unit transaction within the Les Maisons Nassim development led the 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 believes that the recent 10% rise in ABSD for foreign buyers buying residential properties has affected the nascent housing market recovery in the Central Central region.
However, the performance of luxury home sales in the coming year is expected to improve with the opening of Singapore’s borders. “Creating more vaccinated traffic lanes and extending current lanes is expected to attract a portion of the mobile wealthy around the world who are still willing to pay the 30% ABSD to enter Singapore’s stable residential market,” says the report.