Price increases for private homes continue to moderate, with Q3’s price growth being the smallest in over two years.
According to flash estimates released by the Urban Redevelopment Authority (URA), Singapore’s private home prices climbed 1.3 percent in Q3, down from 2.0 percent in the second quarter.
Prices of non-landed private homes rose 2.1 percent in the Outside Central Region (OCR), 1.1 percent in the Rest of Central Region (RCR) and 0.8 percent in the Core Central Region (CCR) in the June-September period.
“Going by our analysis of sales type and property price movement, it would appear that given the currently moderate level of new sales as compared to resale activity, which again lends further support to the argument that there remains a substantial latent demand in the market, resale market activity is likely to continue to support property prices going forward,” said Dr Chua Yang Liang, Head of Research South East Asia at Jones Lang LaSalle (JLL).
He added that “price growth is not expected to surge and neither should we expect a sudden drop in PPI as we have seen in earlier periods, unless the Eurozone financial crisis takes another negative turn that sends further shock waves across Asia. Otherwise we can expect property price growth to maintain at a moderate average pace of 1 percent to 1.8 percent per quarter.”
JLL said the current global economic situation is beginning to affect Singapore, with companies initiating hiring freezes on new staff, which in turn has affected demand for residential properties, especially in prime markets, where new expatriates typically choose to put up.
Meanwhile, the decline in demand, along with an influx of new supply like City Vista Residences, Soleil@Sinaran and Cliveden at Grange in the luxury segment has put downward pressure on rentals, which fell 1.4 percent quarter-on-quarter to S$4.70 psf per month.
“As a result, new properties in the Central and East Coast areas are proving increasingly attractive to occupiers and rental values in these areas remained flat at S$4.50 psf per annum and S$3.45 psf per annum, respectively, in 3Q11,” said JLL.
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