After two consecutive quarters of contraction, private home prices in Singapore unexpectedly increased in the second quarter of 2019. The private residential property price index rose 1.3 percent in Q2, flash estimates from the Urban Redevelopment Authority (URA) showed.
This is compared to the 0.7 percent drop that was registered in the previous quarter. Private home prices also fell 0.1 percent in Q4 2018.
“The price growth in Q2 2019 was led by the non-landed private residential segment (up 1.6 percent quarter-on-quarter) which saw values rise across the three regions: Core Central Region which rose by 1.5 percent quarter-on-quarter; Rest of Central Region with a 3.0 percent quarter-on-quarter rise; and Outside Central Region where prices inched up by 0.5 percent quarter-on-quarter,” said Tricia Song, head of research for Singapore at Colliers International.
She noted that home values largely moderated since the government introduced new cooling measures in July 2018. With this, she attributed the broad-based increase in home prices “to improving rents amid lower completions, and a resilient economy and demand for homes”.
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Desmond Sim, CBRE’s head of research for Southeast Asia, on the other hand, attributed the positive upswing to the new benchmark pricing achieved at new launches as well as the slowdown in the secondary market.
“Based on caveats lodged, comparing 1H 2018 to 1H 2019, there was a significant reduction (-54.3 percent) in resale volume from 7,146 units to 3,266 units. New sales on the other hand remained fairly stable at 3,874 units in 1H 2019, vis-a-vis 3,688 units in 1H 2018.”
Nonetheless, Sim believes that the increase is merely an anomaly from the previous two quarters, given the downward revision in global economic forecasts and the rising unsold inventory to come from more launches.
“One swallow does not make a summer and one quarter of price growth does not necessarily indicate an uptrend hence forth,” said Song.
“We think developers will remain prudent in their pricing strategy, eschewing any sudden sharp increase in prices – particularly for projects that are moving slowly.”
Fiona Ho, Digital Content Manager at PropertyGuru, edited this story. To contact her about this or other stories, email fiona@propertyguru.com.sg
