SINGAPORE: Private home prices in Singapore in the second quarter fell 1.1 per cent from the previous quarter, according to flash estimates by the Urban Redevelopment Authority (URA) on Wednesday (Jul 1).
The private residential property price index decreased by 1.7 points from 152.1 points in the first quarter to 150.4 points in the second quarter.
"This represents a decrease of 1.1 per cent compared to the 1 per cent decrease in the previous quarter," said URA.
Prices of non-landed private residential properties in the Core Central Region decreased by 0.1 per cent, compared to the 2.2 per cent decrease in the previous quarter.
Those for the Rest of Central Region decreased by 1.9 per cent, compared to the 0.5 per cent decrease in the previous quarter.
Prices in Outside Central Region remained unchanged, compared to the 0.4 per cent decrease in the previous quarter.
As for landed properties, prices decreased by 2.7 per cent compared to the 0.9 per cent decrease in the previous quarter.
DECLINE EXPECTED: ANALYSTS
The flash estimates fall "well within expectations" due to the COVID-19 "circuit breaker" period, said property analyst Ong Kah Seng.
The continued price decline in the second quarter was also "quite in line" with the current economic recession "impacting buyers' affordability", he added.
"Overall marginal price decline in Q2 2020 was cushioned and supported by both 'major opportunistic buying of high-end properties' during April and May from wealthy buyers who are never underpinned by affordability, as well as 'a laggard improvement in suburban condo sales' in May and June," Mr Ong added.
Senior director of research and consultancy at JLL Ong Teck Hui said the decline in the overall price index is expected, given the absence of new major launches and significant slowdown in market activities as a result of the circuit breaker measures.
He said the gentle decline in the private home price index, despite the severe setback due to COVID-19 measures, points to a "fairly resilient market".
"In general, sellers are not unduly pressured, although buyers remain cautious and price-sensitive," he said, adding that the resumption of launches will place more units for sale on the market and that pricing is expected to be more competitive to attract buyers.
"Barring a significant deterioration in market conditions in the second half of the year, we can expect prices to continue easing gently."
OrangeTee's head of research and consultancy Christine Sun said housing demand has remained relatively subdued across the globe, Singapore included, given the uncertainties in the trajectory and development of the coronavirus.
"However, it could be too early to conclude that this is the beginning of a sustained period of price declines. We should be cautious in interpreting the price dips in a volatile market, particularly when sales volume is low," she said.
Ms Sun added that the property market should be observed for a few more quarters to ascertain if prices have bottomed.
Colliers International's head of research for Singapore Tricia Song said private residential prices could decline 5 per cent this year, in line with the economic contraction, as home prices are highly correlated to household income and job security.
"We expect 2020 developer sales to fall 29 per cent to 7,000 units from the 9,912 units in 2019," she added.
PropNex CEO Ismail Gafoor said home prices moderated in the last quarter as developers have been pricing units sensitively and sellers are more realistic with their asking prices.
"Having said that, we think the 1.1 per cent price drop in Q2 was measured and reflected some resilience amid this pandemic," he said.
He predicted overall private home prices would fall by up to 3 per cent for the full-year 2020, with a potential rebound in new home sales lending support to prices in the second half of the year.
URA's 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 statistics will be updated on Jul 24 when URA releases its full set of real estate statistics for the second quarter of 2020.