1. Navigating the landed market

In land-scarce Singapore, landed properties are a highly coveted asset. If you are reading this, you might be considering purchasing a property of your own, or are a landed homeowner looking to rebuild. In either case, this article looks to give a short introduction to the landed property market in Singapore so that you know what you have and what you can do with it. Let’s dive right in

Landed properties comprise 5% of the entire housing stock in Singapore (73,000+ in count). From serving as a store of value or as a personal abode, owning a landed home can be a rewarding experience. The barriers to entry are expectedly high, with entry prices in 2021 at the S$3Mn range. Purchase rights only also exclusive to Singaporeans and selected foreign individuals. Additionally, within these 73,000+ houses are different categories of landed properties with different pricing premiums, exclusivity, and development controls


2. Categories of landed housing

There are 3 main categories of landed properties in Singapore, and it is important to note their definitions and accompanying characteristics: 

Also known as bungalows, detached houses are a premium category even within the landed property asset class. They are independent dwelling units, usually of one-two storeys and do not share a common wall with another property. Bungalows were initially introduced in Singapore by the British in the 1830s, with early versions largely single storey with elevated timber floors. You may still see some of these bungalows in Singapore today, from the oft mentioned Black and White Bungalow (1900 - 1920s) to the Art Deco Bungalow (Late 1920s - 1930s). These bungalows are often the subject of restoration and A&A to preserve their original character while introducing modern day utilization. Bungalows have a minimum plot size of 400sqm amongst other controls stipulated by the URA (see our following article for more on landed housing controls)

Additionally, there is a sub-category within Detached Houses called Good Class Bungalows (GCBs). These are the most exclusive properties in Singapore, with only 2,800+ units available at 39 gazetted GCBs areas in Singapore. You can learn more about the GCB gazetted areas at URA [@https://www.ura.gov.sg/Corporate/Guidelines/Development-Control/Residential/Bungalows/Locational-Criteria|here]. GCBs have a minimum plot size of 1,400 sqm and have even tighter controls than regular bungalows. Collectively, Detached Houses command the highest median price at $9,690,000 in 2021, up from $9,000,000 in 2018 with a 8% growth across the period

1. Detached Houses 

These houses are defined to be a pair of conjoined buildings with a common party wall in-between, and can either be attached side-by-side or back-to-back. The concept of semi-detached houses came about due to developers wanting to maximize single family units in plots of land, while also providing a new and more affordable housing option for those looking to get their own property. Aesthetically, the paired houses usually mirror each other in terms of architectural style, design influences and physical dimensions. However in recent years, we are seeing more semi-ds breaking away from the mold, expressing individual styles of the homeowner

There are currently 22,000+ units of semi-detached houses nationwide, with each having a minimum plot size of 200 sqm. Depending on their layout, the minimum plot width is 8m if they are side-by-side, and 10m if they are back-to-back. The median price for a semi-detached will set you back $4,550,000 in 2021, up by 14% from $3,998,900 in 2018 


2. Semi-Detached Houses 

Last but certainly not least, there is the terrace house category in Singapore. The term was coined by the URA in the early 1990s to describe terrace-style housing built in the 1950s and 1960s. Terrace units typically comprise a row of at least 3 units, with 2 corners and shared common walls in-between. In the past, central courtyards and airwells were commonly used to combat the lack of lighting and poor circulation associated with these houses. As the years went on, creative ideas were incorporated in modern terraces, replacing traditional solutions that were once employed to introduce light and ventilation into the house

There are two subcategories of terraces: Corner and intermediate terraces. The difference is determined by their positioning along the row of terraces. They are further split into Type I and Type II, each with their respective plot size and width. Terraces have the lowest entry level relative to Semi-Ds and Detached, with a median price of $3,100,000 in 2021. Terraces, however, enjoyed the highest growth from 2018, by 15% from a median price of $2,688,000. Supply for terrace houses is the highest as well, with 40,000 units available in 2021

For each type of housing, it is critical for investors and homeowners to note that there are differing planning & envelope controls for redevelopment purposes. Read article 2 here, more on that topic. In the following section, we delve into historical transactions for landed houses to gleam noteworthy trends about the market 

3. Terrace 

3. Transaction trends (2018-2022)

Due to land scarcity in Singapore, the supply of landed houses is naturally limited. Supply has remained relatively stable at 73,000+ units since 2018. Supply of total landed residentials in the pipeline have also dwindled across the years, from 3,885 units in Q1’12 to 970 in Q1’22*, which means that private properties will only get scarcer over time, if demand for them continues to grow 


(i) Landed property will likely remain a strong store of value 

2021 was a notable year for the resale landed homes market, with a record sales volume of 3,024, of which the largest growth was seen in the terrace category. According to URA, there are currently 10 projects in the pipeline^, yielding a total of 539 new units. Out of those, 68% will be terrace houses, 31% will be semi-detached, with the remaining 1% to be detached houses 

[ *Singstat: Supply Of Private Residential Properties In The Pipeline By Development Status (End Of Period)]

[ ^URA: Private Residential Projects in the Pipeline. Only projects with at least 15 units (for landed properties) are included] 


Demand for landed housing is expected to persist, especially given macro-economic trends in 2021 (e.g. Housing development crisis in China), that should see funds seek safe havens such as Singapore. Continued growth of median income for the top 10th percentile of Singaporeans (8.2% in last 2 years) should lead to strong domestic demand as well. On the other hand, there is an ongoing trend of a decreasing average household size, from 3.51 persons in 2011 to 3.15 persons in 2021. We see this trend as a tailwind for terrace houses, which can easily accommodate smaller, affluent family units whom are seeking landed properties 

(ii) During economic uncertainty, Resale volumes hold strong while new developments taper off

In 2019, transaction volume of landed residences took a significant correction with the Covid-19 pandemic and impact from the US-China trade war. However in 2020, despite global uncertainties, median prices for resale transactions grew by 8% while the transaction volume bounced back with a growth of 43% over the previous year, particularly for detached and semi-detached houses. New developments are most affected by periods of economic uncertainties, potentially contributed by lack of developer liquidity and less favorable interest rates

(iii) Districts 16 and 23 are up-and-coming, boosting demand in the OCR

CCR has historically been the top choice for Singaporeans when it comes to purchasing a landed property. Since 2018, we have observed a steady growth in transaction volume from Districts 15 (Katong, Joo Chiat, Amber Road) and 10 (Ardmore, Bukit Timah, Holland Road, Tanglin), with median prices of $4,200,000 and $6,980,000 respectively. Supported by robust sales, these districts took up 13% and 8% of total transaction volume in 2021, and have always been one of the top performing districts since 2018. Notably, the median prices of the houses in District 10 experienced one of the highest growths in 2021 at 20%, due to a number of GCB transactions

However, we are also observing growing interest in the Outer Central Region (OCR) in 2021. While District 19 (Serangoon Garden, Hougang, Ponggol) has held the top position for highest transaction volume since 2018, other districts like District 16 (Bedok, Upper East Coast, Eastwood, Kew Drive) and 23 (Hillview, Dairy Farm, Bukit Panjang, Choa Chu Kang) have been growing in popularity. Not only have transaction volumes been up by 63% in 2021, but median prices have also increased by 15% in 2021 compared to 2020. The transaction growth in District 16 may be driven by the increasing prices in neighbouring District 15 (Katong, Joo Chiat, Amber Road), which grew by 12% in 2021 to maintain its position as one of the pricier districts in Singapore. Buyers considering homes in locations where the prices have grown too high, may turn their attention to neighbouring locales


(iv) Not all prime districts top the list when it comes to short-term investment 

Properties in prime locations usually hold significant price tags, due to their convenience and proximity to the city centre. When it comes to the most expensive district in Singapore, locations that are top of mind are Districts 9 (Orchard, Cairnhill, River Valley) and 10 (Ardmore, Bukit Timah, Holland Road, Tanglin). However, District 4 (Telok Blangah, Harbourfront) actually commands the highest median price of $13,250,000 in 2021, since most of the transactions came from houses on Sentosa Island that are available for foreign purchases. While District 10 holds the second highest median price in 2021 alongside one of the highest transaction volumes, this is typically not the case for most districts. In areas like District 3 (Queenstown, Tiong Bahru) and 2 (Anson, Tanjong Pagar), transaction volumes are one of the lowest, which may not be ideal for buyers concerned with liquidity

On the flipside, for older districts such as Districts 22 (Jurong), 18 (Tampines, Pasir Ris) and 25 (Kranji, Woodgrove), they have one of the lowest median prices. Among them, district 22 holds greater potential, with its median price up by 12% in 2021 compared to 2018. Similarly, the median prices of district 17 (Loyang, Changi) and district 27 (Yishun, Sembawang) are up by 24% and 22% in 2021 respectively, achieving one of the higher growths even among districts that are more popular. Since transaction volumes and value of properties in these areas are growing, this shows that there is continued interest and may have more developments in the future. While these are ideal for those exploring options to enter the landed market, they should not expect to offload them any time soon given that their overall transaction volumes are still relatively small compared to other locations

(v) 999-year leasehold are of equal value with freehold, although freehold wins in saleability

The general consensus is that freehold properties hold the most value, since they can be held indefinitely by the buyer, which is a common misconception. If the property is sitting on a site earmarked for development, it can be taken back by the government, albeit at a compensation of existing market price. On the other hand, we have properties with 999-year leasehold, which are essentially ‘freehold’ properties as well. These properties came about from the British era, for those who had attained success and wanted to leave behind legacy for their later generations, with a compromise that the government was able to take back the land in the future for redevelopment. The transaction volume of freehold properties has always been higher than 999-year leasehold, largely due to the fact that there have been no new 999-year leasehold properties for a long time. When it comes to median prices, freehold properties hold a slight edge over 999-year leasehold, although the gap has been shortening in recent years, and now 999-year leasehold properties generally fetch an equitable value with freehold

On the other hand, there are 99-year leasehold properties, where despite having similar transaction volume with 999-year leasehold, median prices are much lower, which can be attributed to the limited lifespan that 99-year properties hold. In fact, Singapore Land Authority calculated the average value of leasehold land by pegging it to a percentage of its freehold counterpart. To put it simply, for a plot of land with 99-year leasehold and 50 years in, it is valued at $5 million. But if it was freehold, it would have been $6.7 million. You may find the full table [@https://www.sla.gov.sg/qql/slot/u143/State-Land-n-Property/Land%20Sales%20and%20Lease%20Management/DP%20policy.pdf|here]. The effect of lease decay is greater for 99-year leasehold, is not linear, and accelerates more sharply nearing the end of the lease, particularly from the 60th year onwards. Hence for those looking to pass on their legacy for generations to come, this will be an important consideration, even for 999-year leasehold properties


4. Conclusion

Overall, we expect landed properties to continue being a prized asset in Singapore. With macroeconomic headwinds across 2022-2023, it is uncertain how prices evolve given rising interest rates, and a stagflationary environment. We do believe however, that the fundamentals of landed property will hold strong given the limited supply and consistently strong demand from Singapore's affluent and selected foreign buyers


Introduction guide to the broad overview of Singapore’s landed property market

Landed properties in Singapore