Private residential prices climb 0.9% q-o-q in 3Q2019, led by high prices at new launches

SINGAPORE (EDGEPROP) - Flash estimates from the URA show that private residential property prices climbed by 0.9% q-o-q in 3Q2019. This is the second straight quarter that prices have increased, following the 1.5% increase recorded in 2Q2019.

This means that private home prices have cumulatively increased by 1.7% since the start of the year. Private home prices are now 1.7% above the most recent peak in 3Q2018, and just 1.6% below the record high in 3Q2013, according to Colliers International.

The number of new and resale transactions also increased, and 3Q2019 saw 5,039 units sold, compared to the 4,571 units in 2Q2019. This is according to caveats lodged as at Oct 1.

The increase in sales and prices suggests that more buyers who were previously sitting on the sidelines, are now coming back to the market, says Lee Nai Jia, head of research for Knight Frank Singapore.

The most recent price growth was led by transactions in the non-landed private residential segment, which grew by 1.7% q-o-q. The flash estimates show that prices of non-landed private residential properties in the Core Central Region (CCR) increased by 2.9% q-o-q in 3Q2019, while prices in the Rest of Central Region (RCR) climbed by 1.6% q-o-q, and prices in the Outside Central Region (OCR) rose by 0.7% q-o-q.

“A closer look at the transactions ... suggests that the increase in Q3 non-landed CCR prices could be due to the new launches” during the quarter, says Tricia Song, Colliers International head of research for Singapore. For example, Dunearn 386 sold six units at a median price of $2,516 psf, a benchmark price for the Dunearn road/Shelford area. Earlier luxury project launches such as Boulevard 88 and 3 Cuscaden also continued to move units, albeit at a relatively slower rate.

Meanwhile, relatively high price-points achieved at new launches in the RCR also helped to push up prices in the sector. These include Avenue South Residence, One Pearl Bank, and Meyer Mansion. The 200-unit Meyer Mansion set a record price level for an East Coast project, selling 26 units at a median price of $2,724 psf.

Meanwhile, the landed homes segment underperformed, clocking an unexpected price decline of 2.2% q-o-q, after a lacklustre decline of 0.1% q-o-q in 2Q2019. The performance could be due to limited transactions during the period, as well as the continued impact of the July 2018 property cooling measures on this segment, says Song.

On the overall private residential market outlook, she says: “The underlying demand for homes remains resilient and has supported sales and prices in recent months. In addition, the more benign interest rate environment is also favourable for the housing market.” But the government is unlikely to impose additional property cooling measures as the pace of price increases has slowed, coupled with a slower economy, says Song.