SINGAPORE: Private home prices in Singapore continued its decline into the first quarter of the year, as cooling measures implemented mid last year continued to bite and developers launched more properties than they sold.
Prices of private residential properties fell 0.7 per cent in the first three months of the year, a sharper decline from the 0.1 per cent decrease in the fourth quarter of last year, the Urban Redevelopment Authority (URA) said on Friday (Apr 26).
This marks the second straight quarter of price decline for the sector and is slightly steeper than the 0.6 per cent decrease in URA's flash estimates released on Apr 1.
In the landed property market, prices rose by 1.1 per cent, up from the 2 per cent decrease in the last quarter of 2018.
Non-landed property prices declined 1.1 per cent, compared with the 0.5 per cent increase in the previous quarter.
Some analysts said the price softening was mainly due to non-landed homes in the Core Central Region (CCR) and Rest of Central Region (RCR), which were hit harder by the cooling measures launched in July last year.
"The cooling measures, especially the higher ABSD rates would have impacted investor buyers in CCR and RCR more significantly resulting in sharper price declines," said Mr Ong Teck Hui, senior director of research and consultancy at JLL.
Prices of non-landed properties in the CCR fell 3 per cent in the first quarter, extending the 1 per cent decline in the previous quarter. Those in the RCR decreased 0.7 per cent, reversing from a 1.8 per cent increase the previous quarter.
"On the other hand, the price index for non-landed homes in Outside Central Region (OCR) increased 0.2 per cent in the first quarter, reflecting its resilience due to support from more buyers for owner occupation, including upgraders, as well as availability of more affordable homes," he added.
PRIVATE HOME RENTS UP 1 PER CENT
Rentals of private residential properties increased 1 per cent in the first quarter of 2019, up from a 1 per cent decrease in the previous quarter.
Landed property rental prices rose 0.2 per cent this quarter, up from the 2.1 per cent decrease in the fourth quarter of 2018. Non-landed property rentals also increased, by 1.1 per cent, compared with the 0.8 per cent decrease in the previous quarter.
Non-landed property rentals in the CCR and OCR went up, by 1.6 per cent and 1.7 per cent respectively. Meanwhile, rentals in the RCR declined 0.3 per cent.
LAUNCHES VS SALES
Developers launched 2,989 new private homes in the first quarter of the year, about 80 per cent more than the 1,657 units launched in the previous quarter. This number excludes executive condominiums (ECs).
Of these, 1,838 private residential units were sold, a notch higher than the 1,836 in the previous quarter.
No executive condominiums were launched for sale, but developers sold 10 units from previous launches.
Mr Ong noted the "significant" mismatch between launches and sales take-up.
"Demand continues to be affected by the cooling measures imposed in July while softening prices would have resulted in more buyers adopting a wait-and-see attitude," he said.
He added that going forward, developers may be compelled to adjust the prices of previously launched projects and price new ones more competitively in order to attract buyers.
In the secondary market, 1,858 properties were resold in the first quarter of 2019, a slight dip from the previous quarter’s 1,971. Resale transactions accounted for 49.6 per cent of all private property sales, down from 51.1 per cent in the previous quarter.
Additionally, there were 47 sub-sale transactions in the last quarter, a decrease from the 53 units transacted in the previous quarter. Sub-sale transactions made up 1.3 per cent of all sale transactions, compared with 1.4 per cent the previous quarter.
A total of 53,284 uncompleted private residential units (excluding ECs) are in the pipeline with planning approvals as at the end of the first quarter of 2019, more than the 51,498 in the previous quarter.
By the end of the latest quarter, 36,839 of these units remained unsold, up from 34,824 units in the previous quarter.
URA said 7,745 units (including ECs) will be completed by the end of 2019, based on the expected completion dates reported by developers.
Going forward, Ms Tricia Song, head of research for Singapore at Colliers International said that while the property cooling measures have been effective in bringing down prices and total transaction volumes, the planned expansion by Marina Bay Sands and Resorts World Sentosa could provide some upside.
"The recent announcement of an additional S$9 billion investments committed by Singapore’s two integrated resorts (IRs) could boost employment, GDP growth and thus confidence in property. It could also draw more foreigner interest in Singapore residential property," she said.
Residential projects within the vicinity of upcoming MRT stations along the Cross Island Line and areas marked for further development under the Draft Masterplan 2019 may also see an increase in buyer interest and possibly an uplift of prices in the future, said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.