2Q2020 private residential property prices fall 1.1% q-o-q: URA flash estimates

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/ EdgeProp Singapore
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July 1, 2020 4:19 PM SGT
SINGAPORE (EDGEPROP) - Private residential property prices in Singapore fell in 2Q2020, marking a 1.1% q-o-q decline and recording its second consecutive quarterly decline in the year, based on flash estimates released by URA on July 1.
Private home prices are now 0.5% above its most recent peak in 3Q2018, and 2.7% below its all-time peak in 3Q2013, says Tricia Song, head of research for Singapore at Colliers International.
The residential property price decline in 2Q2020 also marks the largest quarterly price drop in almost six years, since private home values fell 1.1% in 4Q2014, says PropNex Research.
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The fall in private home prices in 2Q2020 was largely driven by falling prices in the landed housing segment, which saw a 2.7% q-o-q decline.
Meanwhile, prices in the non-landed residential segment fell 0.6% q-o-q, driven by the Rest of Central Region (RCR), which fell by 1.9% q-o-q; and the Core Central Region (CCR), which saw prices fall by 0.1% q-o-q. The Outside Central Region (OCR) remained unchanged from 1Q2020.
Correspondingly, transaction volume of landed properties dropped 58% in 2Q2020, observes Ong Teck Hui, senior director of research & consultancy at JLL. “As landed properties have high absolute values, it has been more difficult to market them, especially with circuit breaker measures in place,” he says.
Based on URA data as at July 1, developers sold a total of 1,343 new private homes (excluding executive condominiums) in 2Q2020, registering falls of 37.5% q-o-q and 42.9% y-o-y.
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In the CCR, about one-third of non-landed transactions registered in 2Q2020 came from Kopar At Newton, observes JLL’s Ong. The project sold 110 units over 2Q2020, at a median price of $2,264 psf. Ong says the relatively lower pricing at Kopar At Newton - as compared to new sale transactions in the previous quarter - contributed to the marginal easing of CCR home prices over the quarter.
Meanwhile, in the RCR, all non-landed new sales were from previously launched projects, says Ong, noting that there was an absence of significant new launches setting new benchmark prices in the submarket. Developments such as Parc Esta, Stirling Residences and JadeScape sold 101, 63 and 73 units respectively in the quarter, despite circuit breaker measures.
In the OCR, prices have shown resilience due to “their relative affordability and lack of future new supply”, says Colliers’ Song. In the region, Florence Residences sold 133 units at a median price of $1,513 psf, compared to 57 units at $1,496 psf in 1Q2020. Meanwhile, Treasure at Tampines moved 132 units at $1,355 psf in 2Q2020, compared to 216 units at $1,363 psf in 1Q2020.
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2020 outlook

Overall, property consultants forecast private home prices in Singapore will fall by 3% to 6% in 2020. Song expects that this will be accompanied by a contraction in developer sales volume to 7,000 units, from the 9,912 units sold in 2019.
Ismail Gafoor, CEO of PropNex, forecasts that a potential rebound in new home sales could lend support to home prices in 2H2020.
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