Private home prices up 3.4% in second quarter

Private home prices up 3.4% in second quarter

Private home prices rose 3.4 per cent in the second quarter of this year, according to the latest figures from the Urban Redevelopment Authority (URA) on Friday (Jul 27).

This continues a rising trend in the last three consecutive quarters, with prices rising 3.9 per cent in the first quarter of this year, 0.8 per cent in the preceding quarter and 0.7 per cent in the third quarter of last year.

For landed properties, prices rose by 4.1 per cent in the second quarter of 2018, compared with the 1.9 per cent increase in the previous quarter.

Prices of non-landed properties rose by 3.2 per cent, compared with the 4.4 per cent increase in the previous quarter.

Of these, prices of non-landed properties in the Rest of Central Region (RCR) rose the most, with a 5.6 per cent increase in the second quarter. Prices in the Outside Central Region (OCR) rose 3 per cent during the same period, while prices for those in the Core Central Region (CCR) rose 0.9 per cent on-quarter, figures showed.

Rentals of private residential properties increased by 1 per cent in the second quarter of the year, compared with the 0.3 per cent increase in the previous quarter.

EFFECTS OF COOLING MEASURES TO COME SOON: ERA, PROPNEX

While the property market is showing signs of recovery, the effects of additional cooling measures introduced earlier this month may be felt soon, real estate agency PropNex said.

“While the market witnessed a continued positive growth this quarter, the repercussions of the sudden cooling measures are expected to be felt in the coming quarters,” said PropNex CEO Ismail Gafoor.

“Buyers and investors might start to adopt a ‘wait-and-see’ attitude to gauge the effects of the measures,” he added.

He noted that developers will also factor in the higher rates for the Additional Buyer’s Stamp Duty (ABSD).

“At recent launches, developers are also adjusting their development prices sensitively with some offering discounts of up to 10 per cent, factoring in the Additional Buyer’s Stamp Duty increase that their buyers will incur.

“These will indirectly correlate to the price index movements in the coming quarters,” he said.

Real estate agency ERA said it expects price growth in the private property market to slow or even plateau with the recent cooling measures.

“Almost all segments of the market are affected by the new measures, but we expect the largest impact to be felt among the luxury segment,” said Key Executive Officer Eugene Lim.

Mr Lim said ERA has lowered its price growth estimate for the private housing market from between 10 to 12 per cent to between 7 and 10 per cent, while PropNex’s Mr Ismail said he expects prices to grow between 7 and 9 per cent this year.

EN BLOC FEVER TO COOL: ANALYST

CBRE said it expects the en bloc market to cool down with the new measures’ impact on land acquisitions.

Under the new cooling measures, companies buying properties will pay ABSD rates of 25 per cent – up from 15 per cent – with developers paying an additional 5 per cent.

“Developers will have to adjust their pricing expectations, marketing strategies and timing of their launches,” CBRE said.

Source: Channel NewsAsia – 27 Jul 2018

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