Private home prices inch towards new peak after 3.4% jump in Q2

Private home prices rose to its highest point in four years in the April to June quarter as transactions and new launches increased and liquidity from en bloc sales flowed into the market, with analysts predicting that prices could recover to 2013 peak levels soon.

The price index for private residential property rose by 3.4 per cent to 149 points in the second quarter, extending a 3.9 per cent increase in the previous quarter, according to flash estimates released by the Urban Redevelopment Authority (URA) on Monday (Jul 2).

This represents the fourth consecutive quarter of increase. The price index is also at its highest level since the second quarter of 2014, when the index was at 149.7 points.

With more buyers entering the market and current home values about 3.6 per cent down from the 154.6-point peak in the third quarter of 2013, prices could soon reach another high.

“The sentiment is inching us towards another peak,” said Ms Christine Li, senior director of research at Cushman & Wakefield Singapore. “Singapore property prices are likely to recover to the 2013 peak levels in one or two quarters,” she added.


One of the factors contributing to the uptick is the large number of en bloc sales seen in the last year, said Ms Li.

“The strong recovery in the residential prices could be attributed to the strong liquidity in the market, as money has been returned to the owners who have participated in the successful collective sales. The recycling of capital is pushing up the prices now,” she said.

Property agency OrangeTee & Tie noted that compared to the same period a year ago, private home prices are up 9.1 per cent – the highest year-on-year increase since 2011.

“With many new launches in the pipeline, we expect private home prices to continue to trend upwards for all market segments for the next quarter, especially since many projects may be launching at new benchmark prices owing to the higher land costs,” head of research and consultancy Christine Sun said.

Ms Tricia Song, head of research for Singapore at Colliers International, is forecasting that the second half of the year could see a further 4 to 5 per cent increase in prices. Colliers has upgraded its forecast for the entire year to 12 per cent from 8 per cent.

ERA’s Key Executive Officer Eugene Lim said: “Market sentiment is still very positive, and this signals that the market is on an upswing trend.

“We see increasingly more buyers who are buying now for fear of further price increases going forward. Sellers have also taken the opportunity to revise their asking prices upwards.”

Mr Lim noted that except for the shorter holding period of three years for the Seller’s Stamp Duty, other property cooling measures remain unchanged.

With the buoyant market, it is likely that the Government will keep the measures in place, he said.

“(The Government) has shown that it will intervene if necessary to cool the market, and the possibility remains that it may do so in the future, should price increases be excessive and we see the onset of property speculation.”

In terms of location, prices of non-landed private residential properties rose by 1.4 per cent in the Core Central Region (CCR), 5.7 per cent in the Rest of Central Region (RCR) and 2.9 per cent in the Outside Central Region (OCR) on a quarterly basis.

The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up until mid-June. The final statistics will be released on Jul 27.

Source: Channel NewsAsia – 2 Jul 2018

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