Thought Leadership

• Based on the Ministry of Trade and Industry’s (MTI) Q2 2021 economic survey, Singapore’s economy grew 14.7% year-on-year (y-o-y) in the second quarter of 2021. On a quarter-onquarter (q-o-q) seasonally-adjusted basis, Singapore’s economy actually contracted by 1.8% in Q2 2021, compared to the 3.3% q-o-q expansion recorded in the first quarter of 2021.
• Manufacturing continued to drive the recovery in Singapore, as semiconductor manufacturers and sub-contractors supporting electronics firms reaped the benefits of the global chip shortage. The precision engineering and electronics clusters recorded 24.3% and 18.3% y-o-y growth respectively. These numbers were overshadowed by the impressive growths seen in the transport engineering and chemicals clusters, which recorded 29.6% and 20.1% y-o-y growth respectively, although this was largely the result of the low base effects in 2020.

This article was originally published in https://www.knightfrank.com/

• Prices of non-landed private residential properties (excluding Executive Condominiums (ECs)) grew by a marginal 0.5% quarter-on-quarter (q-o-q) in Q3 2021** to 159.6, with transactions in the Rest of Central Region (RCR) being the main contributor to the rise. The quarterly increase was moderated when compared to Q1 and Q2 2021, where the index grew by 2.5% and 1.1% respectively.
• There were 7,103 non-landed private homes (excluding ECs) transactions in Q3 2021*, a slight 1.4% decrease q-o-q. While both Q2 and Q3 2021 included periods where Singapore was in or reverted to Phase 2 (Heightened Alert), quarterly sales volume largely held up above a respectable 7,000 units. Especially when compared to an average of about 4,162 units during the pre-pandemic year of 2019*.

This article was originally published in https://www.knightfrank.com/

• Keeping with the general upbeat pace of deals in the real estate market, the third quarter recorded some S$7.5 billion of investment deals, with 49.7% contributed by transactions in the public sector. This transaction volume represents a 38.7% quarter-on-quarter (q-o-q) increase from the S$5.4 billion in the previous quarter, and a 58.1% year-on-year (y-o-y) growth from the S$4.8 billion in the same period last year.
• The bulk of investment volume in Q3 was driven by the sale of four Government Land Sales (GLS) sites, with the award of the Marina View reserve site at S$1.5 billion being the top land sale, followed by the Jalan Anak Bukit parcel at S$1.0 billion. With frenzied bidding at certain recent GLS tenders, other land-hungry developers may shift their focus towards the greater diversity offered by smallersized plots in a variety of locations, such as sites with more palatable quantums where owners are attempting a collective sale. With the seal of the Flynn Park collective sale deal at S$371 million or S$1,355 psf ppr, this could cause a ripple effect in the en bloc market given that many owners are keen to collectively sell their ageing units. As such, projects in the range of S$600 million and below with about 600 units might just find willing buyers.

This article was originally published in https://www.knightfrank.com/