Private home prices rose 0.5% in 3Q2017 after 15 quarters of decline

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/ EdgeProp
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October 2, 2017 11:56 AM SGT
Updated, Oct 5, 2017, 12:49 p.m., to reflect changes as shown in print edition of the article in EdgeProp Pullout, Issue 800 (Oct 9, 2017)
Based on flash estimates released by URA on Oct 2, the private residential property index rose by 0.7 point to 137.3 points in 3Q2017, from 136.6 points in 2Q2017. This translates into a 0.5% q-o-q increase, compared with a 0.1% decline in 2Q2017.
This marks the end of a price decline for 15 straight quarters since 4Q2013. For Lee Nai Jia, head of research at Edmund Tie & Company (ET&Co), the overall increase in the private residential price index for 3Q2017 was anticipated. “This can be attributed to an improvement in consumer sentiment, higher sales, the hike in collective sales and the low interest rate environment,” says Lee.
With regards to the sustainability of the turnaround in prices, ET&Co’s Lee comments, “The improvement is unlikely to be a flash in the pan, as private residential sales have been building up for some time.”
Source: Qingjian Realty
Prices of non-landed private residential properties in the OCR rose by 0.7%, driven in part by the strong sales at Le Quest’s launch on Aug 5
Eli Lee, senior investment analyst at OCBC Investment Research, concurs. “The market moves in cycles, so turning points are extremely significant. Like a tanker on the ocean, it is difficult to reverse course, but when it does, it stays on the new path for some time,” says Lee.
While the consensus is that the bottom of the property market is not far ahead, OCBC’s Lee is of the view that the trough is in fact behind us, with home prices likely to have hit their cyclical lows in mid-June.
However, Desmond Sim, head of CBRE Research, Singapore and Southeast Asia, suggests caution. “It is still too early to call for a rebound as we need more than one data point,” Sim comments. “The government will now be monitoring the price performance closely, but the impending rise in interest rates will be a major factor to consider when buyers decide on a purchase.” Sim...