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Singapore private home prices climb 1.5% in Q2 to highest in at least 5 years

Singapore private home prices climb 1.5% in Q2 to highest in at least 5 years

A view of private residential homes and executive condominiums in Singapore. (File photo: Reuters)

SINGAPORE: Private home prices in Singapore rose unexpectedly in the second quarter to hit their highest level in at least five years, with apartments around the central region and suburbs proving most popular with buyers.

The private residential property index increased 1.5 per cent to 150.8 points in the second quarter, beating an initial estimate and reversing two consecutive quarters of decline, data from the Urban Redevelopment Authority (URA) showed on Friday (Jul 26).

READ: HDB resale transactions up nearly 30% in Q2 as prices dip slightly

Private home prices had fallen 0.7 per cent in the first quarter and 0.1 per cent in the October to December period following cooling measures implemented by the Government in the middle of last year.

"A year after the latest measures were implemented, prices displayed resilience to register a healthy rebound this quarter," said Ms Catherine He, associate director of research at CBRE.

"The property price index should remain stable or show moderate growth for the rest of the year. Downward pressure is likely to come only in the mid to long term with the impact of the weaker macroeconomic environment setting in, and when developers are compelled to reduce prices as their sell-by deadlines approach," she added.

Property price index of private residential properties. (Graph: URA)

LANDED HOMES VS APARTMENTS

In the landed property segment, prices fell by 0.1 per cent in the second quarter, compared with the 1.1 per cent increase in the previous quarter.

Prices for private homes in the non-landed segment surged 2 per cent, compared with the 1.1 per cent decline in the previous quarter. Those in the Rest of Central Region (RCR) rose the most at 3.5 per cent, followed by apartments in the Core Central Region (CCR) at 2.3 per cent and those in the Outside Central Region (OCR) at 0.4 per cent.

Number of private housing units launched and sold by developers, excluding Executive Condominiums. (Graph: URA)

Some analysts noted an increase in the number of foreign buyers, saying it bodes well for Singapore amid an uncertain external environment beset with US-China trade tensions and regional geopolitical frictions.

In the second quarter, foreigners bought 253 non-landed homes, up 46.2 per cent from the previous quarter, said Ms Christine Sun, head of research and consultancy at OrangeTee.

"Some investors may have started to rebalance their mix of assets – potentially transferring funds from more volatile capital markets to safer investments like property. This may explain why some foreign buyers have been streaming steadily back into our property market recently and many luxury homes have been snapped up by well-heeled investors," said Ms Sun.

"Property prices in Singapore have been rising steadily through the decades, and have weathered through some of the toughest economic challenges and regulatory curbs," she added.   

RENTALS

In the second quarter, rentals increased by 1.3 per cent, nudging up slightly from the 1 per cent increase in the January to March period. This was mainly driven by the non-landed home segment where rents rose across all three segments.

Ms Sun noted that with the growing political uncertainty and social unrest in Hong Kong, some multinational companies could shift their headquarters or key operations to Singapore, thereby benefitting Singapore's rental market.

LAUNCHES AND SALES

Between April and June, developers launched 2,502 uncompleted private residential units – excluding Executive Condominiums (ECs) – for sale, compared with 2,989 units in the previous quarter. The bulk of the new launches were in the RCR region.

They sold 2,350 apartments, up from the 1,838 units they moved in the previous quarter.

Apartments around the central region and the suburbs proved most popular with buyers, who purchased 1,156 units in RCR and 1,008 in OCR.

READ: As another mega condo launches, will there be enough demand in Singapore's property market?

In the secondary market, there were 2,371 resale transactions in the second quarter, compared with the 1,858 units transacted in the previous quarter.

Resale transactions accounted for 49.7 per cent of all sales between April and June, compared with 49.6 per cent in the previous quarter.

As of end-June, there were 50,674 uncompleted private homes and 3,022 ECs in the pipeline with planning approvals. Of these, 35,538 units remained unsold.

Based on the expected completion dates reported by developers, 4,398 units (including ECs) will be completed in the second half of the year. Another 5,265 units (including ECs) will be completed in 2020.

Source: CNA/aj(cy)

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