SINGAPORE: Singapore's private home prices rose 0.9 per cent in the second quarter from the previous three months, flash estimates released by the Urban Redevelopment Authority (URA) showed on Thursday (Jul 1).
The increase slowed from the two-and-a-half-year high pace in the first quarter, when prices rose by 3.3 per cent. However, it still marked the fifth consecutive quarterly rise, and came despite Singapore reimposing some COVID-19 curbs to combat a spike in community infections in mid-May.
On a year-on-year basis, private home prices were up 7.3 per cent.
The price increase in the second quarter was driven mainly by non-landed homes in the Outside Central Region (OCR), which increased the most by 1.8 per cent, compared with the 1.1 per cent increase in the previous quarter.
Prices in the Core Central Region (CCR) rose by 0.6 per cent, compared with the 0.5 per cent increase in the first quarter. In the Rest of Central Region (RCR), prices were up 0.3 per cent, down from the 6.1 per cent increase in the previous quarter.
BUYERS TURNING TO RESALE MARKET: ANALYSTS
With construction delays and a labour crunch amid the pandemic, more buyers are turning to the resale market, analysts said.
About 60.5 per cent of private property sales last quarter were resale homes, higher than the 56.6 per cent in the previous three months.
Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said there is an "enormous demand" for completed homes in the suburban areas.
More buyers also opted for bigger homes, with 39.6 per cent of transactions with homes of at least 1,200 sq ft, up from 35.8 per cent.
"Space has become a valued asset as many home owners saw their daily lives suddenly confined to their properties," said Ms Sun. "Many owners were looking for homes with outdoor space and additional areas for solitude."
However, some landed home owners raised their asking prices after a strong run-up in prices in the first quarter. This put their properties out of reach of some buyers, resulting in slower price gains in the second quarter, said Huttons Asia CEO Mark Yip.
The second quarter also saw fewer new launches amid Singapore's heightened alert period. This pushed down property prices as new homes are typically sold at higher prices compared with resale homes, said Ms Sun.
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The property market is being propelled by strong demand from Housing Board buyers looking to upgrade, a recovering economy and low mortgage rates, said Ms Sun.
As the economy continues improving and hiring prospects brighten, home prices are likely to continue on their upward trajectory. The scarcity of suburban homes may also keep resale properties attractive, she added.
Huttons' Mr Yip said he expects private property prices to increase up to 8 per cent this year.
"The trend of price growth in the property market while in line with global trends remains a concern as it is likely to exceed the GDP forecast and income growth for 2021," he said.
Rising property prices in the past few quarters have led to some expectations that the Government will step in to cool the market.
Singapore's central bank chief Ravi Menon said on Wednesday authorities were highly vigilant about a sustained increase in home prices relative to income trends, and their goal was to make sure the market did not get ahead of economic fundamentals.
However, he added that the market was not overheated currently.
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 23.