Property technology company Ohmyhome, has announced its property outlook for 2021. Examining key data, trends and expert insights, the company outlined a range of scenarios for the property market in Singapore next year, predicting dwelling prices to rise in Yishun and Geylang – which recorded the highest increase in 2020.
The property forecast will also examine the cross-border property investment between Singapore and Philippines, following Ohmyhome’s entry into the market in the fourth quarter of 2020.
Key Highlights Of The Property Market for 2021 – Singapore:
Amid economic uncertainties and global disruption, Singapore continues to be a desirable place for business growth, driven by proximity to important growth markets, government initiatives and established regulations. The following forecast of the property market also assumes a progressive rollout of a Covid-19 Vaccine amid the Phase 3 regulations and subsequent easing of social distancing measures.
Residential (Public Housing):
- Public housing is forecast to be consistent in demand due in part to the extended lockdowns in 2020 and temporary relief measures.
- New home sale prices are expected to stabilise in 2021. There will be a consistent supply of new flats in 2021, particularly in mature estates such as Geylang, Kallang/Whampoa and Queenstown. Home owners will also have a wide range of options to choose from with the addition of new flats in non-mature estates such as Bukit Batok, Tengah and Woodlands.
- Resale property prices are speculated to go up for a little longer as there is still demand in the market in search for their next homes. Within Ohmyhome, transactions are occurring faster than before.
- Resale volume is expected to continue rising in 2021. There is an increasing demand in the HDB resale market, as observed by the increasing number of HDB transactions in the past 6 years – 17,780 (2015), 19,373 (2016), 20,351 (2017), 21,569 (2018), 21,924 (2019) and 22,727 (2020). In addition, recent growth in the resale market can be seen by the upward trend of the HDB Resale Price Index, over the last 6 quarters.
- With employment levels in Singapore beginning to rebound, there could be sustained momentum in the HDB resale flat market, with new and existing home owners opting for bigger resale flats or moving from private to public housing. Recent launches in highly desirable mature estates last year in places like Bishan and Toa Payoh (Bidadari) have been oversubscribed, which could mean many may turn to resale offerings in their desired areas instead of waiting further. Other indicators turn to the ongoing pandemic which may raise the risk of construction delays and construction supplies from abroad.
- In terms of newly Minimum Occupancy Period (MOP) units (2020/2021), the supply will be coming from Sengkang (6,618), Choa Chu Kang (6,250) and Punggol (5,206).
- A prime location in the public housing market is Bukit Merah, Queenstown and Clementi, with 60% of the 82 transacted units of million-dollar HDB in 2020 located in these towns.
- Real estate virtual home tours will continue to increase amid the pandemic situation in 2021. With travel restrictions in place, virtual home viewing will be the next viable alternative to physical viewings for sellers and buyers who are currently residing overseas. In addition, the increasing role of technology indicates that both buyers and sellers are still seeking for a rich visual experience that simulates the real world. With a sheer number of available properties in the market, the introduction of new technology to enrich these experiences will continue to grow, with the baseline of convenience, streamlining of property transactions, efficiency, higher cost savings, accuracy and transparency of properties as the new normal.
Residential (Private Housing):
- Singapore, having long been established as a global financial centre, will likely see the private housing markets gain further momentum on the back of increased investor activity. According to a report by The Straits Times, Singapore remains an attractive investment decision for businesses to expand their regional operations, with Tencent, Alibaba and other global tech giants reportedly planning regional hubs in the city-state. In the long-term, the presence of these global tech giants joining a diverse cluster of big tech companies like Google, Facebook, Amazon, and Grab will see an influx of tech talent in Singapore, with many companies expected to move teams of employees to head the offices here.
- With foreign capital and businesses expected to flow into Singapore in 2021, investor attention will shift to the private residential sector, with rental yields likely to peak. The South-western region shows great promise, in particular locations at Alexandra Road and Clementi will hold up as quality residential offerings. Property and rental prices for 1-bedroom and 2-bedroom apartments in these areas are expected to rise, to over $3,000 per month for a 2-bedroom. This is in line with the forecasts made by major analysts that property markets in the private residential market have remained resilient, reflecting the strong underlying demand and holding power.
Cross-border Investment in Philippines:
Since Ohmyhome’s entry into the Philippines in the fourth quarter of 2020, foreign investment has been made more convenient than ever, both for investors and Overseas Filipino Workers (OFWs).
- Finance Secretary Carlos Dominguez III and his economic team projects a GDP growth of 6.5-7.5% in 2021. (Philippine Daily Inquirer, Big Bounce Back in GDP growth in 2021)
- Foreign direct investment net inflows continued its growth momentum in August 2020, recording a 46.9 percent expansion year-on-year to US$637 million from US$434 million in August 2019. The FDI net inflows increased for the fourth consecutive month, owing to investors’ renewed confidence as the National Government’s fiscal stimulus and BSP’s accommodative monetary policy stance to mitigate the impact of COVID-19 pandemic gained traction along with the easing of quarantine measures in the country. (Bangko Sentral, Nov 2020 Press Release)
- In addition, net equity capital investments rose by 32.9 percent to US$107 million during the review period from US$81 million a year ago as the growth in equity capital placements (30.1 percent to US$118 million) more than offset that of withdrawals (7.1 percent to US$10 million). Bulk of the equity capital placements during the month originated from Japan, the United States, and the British Virgin Islands. These were invested mainly in the 1) manufacturing, 2) real estate, 3) financial and insurance, and 4) professional, scientific, and technical industries. (Bangko Sentral, Nov 2020 Press Release)
- The Department of Trade and Industry launched an international campaign in Nov 2020 to highlight 5 key investment sectors for foreign investors to look into the opportunities in aerospace, automotive, copper, information technology and business process management (IT-BPM), and electronics sectors. Office leasing and corporate housing is driven by the IT-BPM as the PH accounts for 15% of the global IT-BPM market (2nd largest in the world). (Philippine News Agency, PH Identifies 5 key sectors for foreign investments)
- Doing Business 2020 included PH in the 42 economies that are most improving in 2018 and 2019. Three top drivers for PH are: the ease of starting a business by abolishing minimum capital requirement, easier construction permits by streamlining obtaining occupancy certificates, and protecting minority investors. (World Bank Group, Doing Business 2020)
- One of the top 5 foreign remittance recipient countries in the world with USD35.2 billion. (Migration Data Portal, Remittances 2020)
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