Anti-speculative measures implemented by the government are taking effect, but with different outcomes in both the public and private sectors.
“Price increases in Q2 were marginally below expectations,” said Alan Cheong, Associate Director at Savills Research and Consultancy.
Prices of private properties rose by a smaller percentage in Q2, as potential buyers were cautious about government intervention in the property market.
“Cautious market sentiment has put a lid on price escalation,” said Chia Siew Chuin, Research and Advisory Director at Colliers International. Home buyers and investors are waiting for a “clearer direction on policy changes” after May’s general election.
The Singapore government introduced a series of cooling measures in the property market and the industry has been wary of more possible tightening measures, especially after home prices became a hot issue during the pre-election campaign.
The Urban Redevelopment Authority’s (URA) latest private residential property price index revealed that prices of private homes rose 1.9 percent to 202.8 points in the second quarter, lower than the 2.2 percent increase in the first quarter, marking the seventh consecutive quarter of slower price increases since Q4 2009.
Many property consultants have a conservative view on how far private home prices will continue to increase.
Chia believes that high liquidity and low interest rates will continue to boost buying sentiment and fuel property prices for the rest of the year. However, with the policy risk and several global uncertainties looming, “the pace of price increase is likely to moderate further,” she said.
Joseph Tan, Executive Director (residential) at CB Richard Ellis (CBRE), expects that home prices in the third quarter will remain at the current levels. He said that popular launches in Q2, like Eight Courtyards, were priced between S$790 psf and S$1,000 psf on average, compared to the average selling price of top projects in Q1, which were around S$830 psf to S$1,000 psf.
“Bid prices of recent suburban leasehold condominium sites in state land tenders will translate to a similar price range when they are launched in the next six to 12 months,” he said.
In addition, many private home owners were also reluctant to sell their flats, said Eugene Lim, Key Executive Officer at ERA Realty.
It’s because if they decide to acquire a flat again in the future, they would have to sell their private homes first, as mandated by a rule introduced last year.
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