SINGAPORE: Private home prices in Singapore rose 0.8 per cent in the second quarter, slightly below flash estimates released earlier in the month amid the COVID-19 heightened alert period.
The private residential property price index increased to 163.5 points in the second quarter of 2021, up from 162.2 points in the first quarter, according to real estate statistics released by the Urban Redevelopment Authority (URA) on Friday (Jul 23).
The increase was slower than the first quarter, when prices rose by 3.3 per cent.
Prices were held back by the landed properties segment, which fell 0.3 per cent in the second quarter after a 6.7 per cent increase in the previous quarter.
Prices of non-landed homes increased, albeit by a slower 1.1 per cent compared with the 2.5 per cent rise in the January to March period.
"Several factors have contributed to a relatively slower market in the second quarter," said Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.
"Movement restrictions were further tightened during Singapore’s heightened alert period in May. There were fewer launches last quarter due to Singapore’s heightened alert period when stricter measures were imposed in sales galleries," she said.
With fewer developments launched, new private home sales also took a hit.
Developers launched 2,356 uncompleted private homes (excluding executive condominiums) for sale in the second quarter, compared with 3,716 units between January and March. They sold 2,966 units in the second quarter, compared with the 3,493 in the previous quarter.
In the executive condominium segment, developers launched 413 homes in the second quarter, down from 700 the previous quarter. They sold 495 units, versus 647 in the January to March quarter.
More people bought private homes in the resale market last quarter, with such transactions making up 63.1 per cent of private property sales, higher than the 55.8 per cent in the previous three months.
In all, there were 5,333 resale transactions in the second quarter, compared with 4,519 in the previous quarter.
This is the highest quarterly resale volume since the third quarter of 2009, when 5,809 units exchanged hands, said Ms Sun.
She also noted how the 9,852 resale transactions in the first half of the year was approaching the total 10,729 resale homes sold in 2020, and that 2021's total volume would likely shoot past that.
"Buyers looking for affordable homes may continue to turn to the resale market in the suburban regions or certain city fringe areas. Therefore, this year’s resale volume is estimated to hit 17,000 to 18,000 units, which will surpass the total resale volume in 2020," said Ms Sun.
Rentals saw stronger growth in the second quarter of the year, rising by 2.9 per cent and beating the previous quarter’s increase of 2.2 per cent.
This was driven by the non-landed segment, where rentals rose 3.1 per cent in the second quarter compared with 2.4 per cent in the first.
Rentals of landed homes also accelerated to 1.4 per cent from 0.6 per cent in the previous quarter.
Mr Nicholas Mak, ERA Singapore’s head of Research and Consultancy Department, said the rise in rents was partly due to the delay in completion of HDB and private property projects.
"After declining for half of 2020, the growth rate of the private residential property rental index accelerated in the past six months," said Mr Mak.
"As the pandemic caused disruptions in the construction industry, the completions of both public and private residential projects were delayed. As a result, some households are renting residential properties while waiting for the completion of their acquired properties," he said.
SUPPLY IN THE PIPELINE
As of the end of the first quarter, there were 19,384 unsold and uncompleted private homes in the pipeline – compared with 21,602 in the quarter before.
Including executive condominiums, this goes up to 21,055, lower than the 23,735 in the previous quarter.
Looking ahead, Mr Mak said that the impact of tighter social distancing measures on the real estate market will be repeated in the third quarter, due to the start of new COVID-19 restrictions starting from Jul 22.
Ms Sun added that there are longer-term trends at play that may sustain the property market.
"Singapore, like a magnet to the super-rich and foreign investors, will continue to pull in strong investments year after year. As most mass-market projects have been launched, the supply of new mass-market homes will remain limited. The scarcity of suburban homes may also keep resale properties attractive," she said.