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Singapore's private home prices rise at slightly faster pace of 1.1% in Q3

Singapore's private home prices rise at slightly faster pace of 1.1% in Q3

A row of private residential condominiums near Lower Seletar Reservoir in Singapore on May 6, 2021. (File photo: Roslan RAHMAN / AFP)

SINGAPORE: Private home prices in Singapore rose 1.1 per cent in the third quarter, slightly above flash estimates released earlier this month.

The private residential property price index increased to 165.3 points in the third quarter, up from 163.5 points in the second quarter, according to real estate statistics released by the Urban Redevelopment Authority (URA) on Friday (Oct 22).

Prices were bolstered by landed homes, which increased by 2.6 per cent in the July to September period, compared with the 0.3 per cent decrease in the previous quarter.

Prices of non-landed properties increased by 0.7 per cent, easing from the 1.1 per cent rise in the previous quarter.

Overall private property prices have risen for a sixth consecutive quarter, noted Mr Lam Chern Woon, head of research and consulting at Edmund Tie.

He said that the bulk of the price growth during the pandemic can be attributed to the landed segment, "where new economy wealth and other booming industries" have driven demand.

"We have also observed sharp price growth in landed homes due to capital improvements or redevelopment carried out prior to sale," he said.

RESALE DEMAND

In all, 9,083 private residential properties were transacted across Singapore in the third quarter, with resale homes making up the bulk at 5,362 units.

This is the highest quarterly resale volume since the third quarter of 2009, when 5,809 such units exchanged hands, noted Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.

"Demand has strengthened for both the primary and secondary markets," said Ms Sun.

She said that the number of resale transactions may almost double to around 19,500 to 20,500 units this year from 10,729 units last year, amid stronger demand for resale properties and rising new home prices.

This is also due to a growing number of HDB upgraders who are turning to the resale market in the suburbs given the price affordability and dwindling new home supply, said Ms Sun.

In the new home sales segment, Ms Sun noted that transactions may hit an eight-year high with around 12,000 to 12,500 transactions this year, with the previous high in 2013 at 14,948 units.

"Barring unforeseen circumstances, overall prices may hit 6 to 7 per cent this year, higher than the 2.2 per cent in 2020 and 2.7 per cent in 2019," she said.

Overall, developers launched 2,149 uncompleted private homes (excluding executive condominiums) in the third quarter, compared with 2,356 units between July and September. They sold 3,550 units in the third quarter, compared with the 2,966 in the previous quarter.

In the executive condominium segment, developers launched 496 homes in the third quarter, up from 413 the previous quarter. They sold 717 units, versus 495 in the July to September quarter.

RENTALS

Rentals saw slower growth in the third quarter of the year, rising by 1.8 per cent, down from the previous quarter’s increase of 2.9 per cent.

This was driven by the landed properties segment, where rentals rose 4.7 per cent in the third quarter compared with 1.4 per cent in the first.

Rentals of non-landed homes slowed to 0.7 per cent from 3.1 per cent in the previous quarter.

"As Singapore boosts its efforts to re-open its borders fully, the rental market is poised to benefit when hiring ramps up in the aviation, MICE, hospitality and tourism industries," said Ms Sun. 

"Further, rental demand is likely to improve when more Singaporeans, PRs and foreign expats return, and companies ramp up their hiring of foreign expats."

SUPPLY IN THE PIPELINE

As of the end of the third quarter, there was a total supply of 47,715 uncompleted private residential units and 4,718 EC units in the pipeline with planning approvals.

Of these, 17,140 private homes and 1,581 EC units were unsold as of end-September.

"The property market will be ending the year on a higher note. Market sentiment may improve further as the global economy is expected to do better next year," said Ms Sun.

"The expansion of Singapore’s border reopening will likely spur employment growth and boost the economy further," she said.

Source: CNA/ic

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