With diminishing stock and the improvements in the macroeconomic outlook, the probability of home prices falling this year is not high. As it is, prices of private homes increased quarter on quarter by 2.1 per cent in the fourth quarter of last year, based on the latest flash estimates from the Urban Redevelopment Authority, after rising 0.8 per cent in the previous quarter. Overall private home prices rose 2.2 per cent for the whole of last year.
So what are the property trends to look out for in 2021 & beyond?
2020 saw an increase in racially discriminatory violence against people of Chinese & Asian origin due to pandemic anxiety and the American president calling Covid-19 as the 'Chinese virus' as well as political instability and unrest among citizens across the globe - especially in Europe and America. Many foreign businessmen are now avoiding risky geo-politically troubled cities and looking towards Singapore and Portugal as safe havens as their 2nd home for their beloved families and children's safety.
Property Trend 2:
Limited housing inventory doesn't just drive up home prices; it also gives buyers less selection and forces them to settle. Nobody is talking about new condo 'oversupply risk' in Singapore's residential market as most developers are expected to hold no more land parcels in their stock for 2022. The number of new project launches slated for this year is expected to be lower than in previous years as developers empty out their last remaining land banks from the enbloc fever in 2018. Most of the new launches this year will be mainly in the luxury and city area projects with many of them being smaller residential developments also known as apartment style living without the full condo facilities. About 20 new developments may be released for sale in the first half of 2021. In contrast, around 25 to 30 residential projects launched in each of the half years in 2018 and 2019.
The Government has also calibrated land supply from the Government Land Sales programme. Over the past two years, a conservative slate of land was released to maintain a moderate supply of units. For the first half of this year, about 1,600 new homes could be launched from the confirmed list, much fewer than the average of 2,700 units released in each half of 2018. Many new projects redeveloped from the 2017 to 2018 spate of sales en bloc have already sold more than 70 per cent of their units.
Kiwi Lim from Huttons Asia believes that if the government does not release more land parcels soon, we may see Singapore's available new condo stock in the market falling to historic low by end of 2021.
Properties in the OCR (Outside Centre Region) may see a price increase as Covid-19 pandemic may change the way we work - i.e. there may be more emphasis on remote working or working from home.
New condo projects in Hougang and Serangoon has already reached $1,5xx psf and above with the OCR resale market also showing a rise in prices. These housing markets will grow in popularity due to the remote work trend according to Kiwi Lim from Huttons Asia. "Nowadays, many people are working remotely during the pandemic, and that trend is likely to continue to a certain extent even after it's safe to return to an office building." said Kiwi.
Property Trend 4:
Even as Singaporeans are moving towards OCR and RCR districts, city homes and property in the CCR may still not see a drop in prices as they are the preferred districts for foreign buyers flush with cash. Foreign buyers love the appeal of living in the city surrounded by convenience with proximity to restaurants, museums, theatres and other amenities to match or enhance their quality of life they enjoyed overseas. Many are also city dwellers and are only familiar with the prime districts in Singapore.
Globally, we can expect affluent consumers to continue realigning their priorities to spend more on real estate that gives them and their families a sense of security, health safety, and privacy in a cocoon all of their own. The wealthy is expected to apportion a large part of their hard cash in property in 2021.
Property Trend 6:
As the trend of working from home and telecommuting looks set to become the norm, we will spend more time at home. This may spark a new trend of spending more to make our home look and feel spacious and beautiful. Kiwi Lim from Huttons Asia believe that the demand for larger apartments may increase, e.g. 3 and 4 bedders may see an increase in demand for the need to set aside an extra bedroom as a home office or proper workspace at home becomes crucial as we spend more time working from home. Home owners may be willing to spend much more on interior designing to make their homes look inviting and nicer to cocoon in.
Property Trend 7:
Property buyers may trend towards properties within close proximity to greenery & parks as they spend more time at home. Quality of living and a healthy lifestyle will take more priority in our lives as Covid-19 has placed a higher emphasis on our physical and mental health. Health professionals and gurus worldwide have always encouraged people to talk walks in parks to relief stress and the fresh clean air from greenery and parks or park connectors nearby will do a lot of good for everyone living nearby.