Singapore Housing Market Slightly Overvalued in 2022

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Where does Singapore Property Prices stand in 2022? 

At 0.5 Index value, Singapore home prices are slightly overvalued, but virtually unchanged from last year

Residential house prices in Singapore increased by almost 11% in nominal terms between mid-2021 and mid-2022, representing the strongest growth rate in more than a decade. However, rental price growth has accelerated even more, leaving mid-2022 rents 16% above their mid-2021 levels.

Following construction delays, pent-up demand for housing space from the pandemic and strong expat interest are driving prices up. Singapore’s housing market remains in slightly overvalued territory, virtually unchanged from last year. 

The government has introduced several cooling measures in the last few months to prevent excessive borrowing and the real estate market from overheating. These include higher stamp duties on secondary and subsequent residential properties and tighter lending standards for private and public properties. Also, the government has announced efforts to increase the supply of housing to meet strong demand.

Singapore benefits from its long-standing position as a strong business hub and a safe haven for wealthy investors. However, following construction delays, three times more units should be completed in 2022 and 2023 than in the previous two years. Moreover, rising mortgage rates will have a dampening impact on demand. As a consequence, we expect market sentiment to weaken. But, given the lack of housing speculation and continued foreign demand growth, a price correction in nominal terms is unlikely in the short run.

Source: ubs-global-real-estate-bubble-index-en-pdf  – page 19