Firm foundation in SG for mass-market condos supports demand
Strong market fundamentals support demand and prices for mass-market apartments
Private non-landed homes are becoming more popular as HDB prices and median incomes rise.
The most common type of private housing in Singapore is mass-market apartments, which account for around half of all condominiums sales. This segment greatly influences the price trend and market dynamics in the wider private property market.
In this study, mass-market residential condominiums (excluding executive condominiums), are all types non-landed private residential properties located outside the Central Region. These condominiums are generally gated and offer amenities such a private security, parking lots, landscaping, swimming pools, gymnasiums, and more.
Prices Trends
After a 4 year decline, the prices of housing in private homes began to increase again during Q3 2017 after a decline that lasted from 2013 until 2017. Over the past 5 years, OCR residential non landed property prices have increased by 39.8%. They are outpacing the 34.3% rise in island wide private non landed housing prices. OCR condominium prices have seen a significant increase between late 2021 and Q3 2022. The growth was mainly driven by HDB resale price increases.
Rental Trends
Rents for residential non-landed property increased faster than the price in the past five. The price index of non-landed residential properties rose by 34.3% between Q4 2016 and Q4 2018. This was surpassed by the 45.2% increase in the rental index. The OCR housing index rental index experienced the largest growth of 55.9% during the same period.
Market Size
Over the last 19 year, mass market property has consistently ranked as the largest segment in terms on housing units. This is mostly due to OCR covering four out of the five regions of Singapore.
Buyer Profile
HDB upgrades tend to buy suburban condos more than other housing segments. In 2022 HDB buyers accounted for 45% (of mass-market condo purchasers), challenging the perception that HDB owners dominate the OCR housing market.
Conclusion
HDB flat owners can upgrade to mass-market units, as demand and prices are supported with strong market fundamentals. These include the growing interest of HDB upgraders as well as investors, as well as an increase in HDB resale rates and median income.
Around 30 to forty private housing units are planned to launch by 2023. A third of them will be in the OCR. This should meet the OCR’s demand for new housing, while not causing an oversupply.
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