SINGAPORE: The Urban Redevelopment Authority (URA) announced flash estimates on Thursday showing that private property prices in Singapore grew 0.9 percent in the second quarter compared to the previous three months (Jul 1). Prices rose at a slower pace in the second quarter after reaching a two-and-a-half-year high in the first quarter, when they rose by 3.3 percent. Despite Singapore reimposing some COVID-19 curbs to fight a spike in community infections in mid-May, it was nevertheless the seventh straight quarterly increase.
Private property prices increased by 7.3 percent year over year.
The growth in the second quarter was mostly driven by non-landed dwellings in the Outside Central Region (OCR), which climbed by 1.8 percent compared to 1.1 percent the previous quarter.
The Core Central Region (CCR) saw a 0.6 percent increase in prices, compared to a 0.5 percent increase in the first quarter.
Prices in the Rest of Central Region (RCR) increased by 0.3 percent, down from 6.1 percent the previous quarter.
READ: Second-quarter HDB resale prices up 2.8 percent: Estimates in a hurry
ANALYSTS SAY BUYERS ARE TURNING TO THE RESALE MARKET.
More purchasers are resorting to the resale market as a result of construction delays and a labor shortage caused by the epidemic, according to analysts.
Resale properties accounted for over 60.5 percent of private property transactions in the third quarter, up from 56.6 percent in the previous three months.
Ms. Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, stated that there is “enormous demand” for finished homes in the suburbs.
More purchasers also chose larger homes, with 39.6% of deals involving properties of at least 1,200 square feet, up from 35.8%.
“Space has become a valuable item as many homeowners’ everyday activities have grown restricted to their homes,” Ms Sun explained. “Many homeowners were looking for homes with additional areas for seclusion and outside space.” After a big run-up in prices in the first quarter, several landed house owners boosted their asking prices. According to Huttons Asia CEO Mark Yip, this put their properties out of reach for some buyers, resulting in slower price rises in the second quarter. Due to Singapore’s increased alert period, there were fewer new launches in the second quarter. According to Ms Sun, this pushed down property values because new homes are often offered at greater costs than resale properties. READ: Due to tightened COVID-19 border restrictions, BTO projects are projected to be ‘delayed’ by a year or more. READ: Analysts predict that private property prices will continue to grow due to a lack of supply and strong demand. Strong demand from Housing Board buyers eager to upgrade, a growing economy, and cheap mortgage rates are propelling the property market, according to Ms Sun. Home prices are projected to continue rising as the economy improves and job prospects improve. She said that the shortage of suburban homes may keep resale properties appealing. Mr Yip of Huttons predicts that private home prices would rise by up to 8% this year. “While in keeping with worldwide trends, the path of price increase in the property market remains a concern, as it is anticipated to exceed the GDP forecast and income growth for 2021,” he said. Is it still cheap for first-time homebuyers to buy a house? In recent quarters, rising housing prices have fueled speculation that the government will intervene to cool the market. On Wednesday, Singapore’s central bank governor Ravi Menon stated that officials were extremely concerned about a protracted rise in property prices compared to income trends, and that their goal was to ensure that the market did not outstrip economic fundamentals. He did clarify, though, that the market was not now overheated. The URA’s flash estimates are based on transaction prices stated in contracts submitted for stamp duty payment, as well as statistics on units sold by developers up until the middle of June. On July 23, the statistics will be updated./n
