Private residential prices fall 0.6% in 1Q2019 for second straight quarterly decline
By Timothy Tay
/ EdgeProp |
The price index for private residential property fell by 0.6% q-o-q in 1Q2019, compared to a 0.1% q-o-q decline recorded in 4Q2018, according to the latest flash estimates by the URA.
With two straight quarters of price declines, overall private home prices are now 0.7% below the most recent peak in 3Q2018, and 3.8% below the all-time peak in 3Q2013, says Tricia Song, head of research for Singapore at Colliers International.
“Weaker sentiment in the residential market is likely to persist in the near term and may discourage buyers from committing early for fear that prices could erode further in the coming quarters,” says Christine Li, head of research, Singapore, at Cushman & Wakefield.
CCR
The price index for non-landed private residential properties in the city-centre, or Core Central Region (CCR), fell by 2.9% q-o-q compared to the 1% decrease in the preceding quarter. This is the sharpest quarterly price decline for the segment since a 5.2% q-o-q decline in 2Q2009 following the Great Financial Crisis. Overall prices in the CCR have now fallen by 3.9% since its last peak in 3Q2018, says Song.
One reason for the decline could be a normalisation of the segment’s prices post-collective sales frenzy, says Li. “During the recent collective sales boom, many en bloc speculators could be paying a premium to those en bloc hopefuls. But with the collective sales boom coming to an end, the premium effect is no longer on the horizon.”
A decline in median prices for certain projects as developers seek to clear inventory could be another reason for the decline in CCR prices during the quarter. They include projects like 3 Cuscaden, Marina One Residences, Martin Modern, New Futura, South Beach, and TwentyOne Angullia Park, says Song.
Boulevard 88 (Picture CDL)
At the same time, projects that were launched last quarter, such as Fourth Avenue Residences, RV Altitude, and Boulevard 88, have achieved benchmark pricing. “The encouraging sales for Boulevard 88 have demonstrated that prices of choice developments are expected to stay resilient,” says Tan Tee Khoon, head of residential project marketing at Knight Frank Singapore.
RCR and OCR
Meanwhile, prices in the Rest of Central Region (RCR) fell by 0.2% q-o-q after registering a 1.8% q-o-q increase in 4Q2018. There was no change in prices in the suburbs, or Outside Central Region (OCR), last quarter, following a 0.7% increase in the preceding quarter.
For all the regions combined, transactions (excluding executive condos) last quarter fell by 16% q-o-q to 3,215 units, based on caveats lodged in URA Realis. This is a 40% y-o-y decline compared to the 5,328 caveats recorded in 1Q2018.
But non-landed residential properties in the OCR bucked the trend as transactions picked up 5% q-o-q to 1,535 units during the quarter. There were progressive take-ups in large launches, in particular those near the Cross Island Line MRT stations, says Colliers’ Song.
“Prices (in the RCR) appear to be stabilising, after the uptick that arose from good performances in new launches such as Arena Residences, Kent Ridge Hill Residences, Parc Esta in Q4 2018,” she says.
The crowd at the sales gallery of Parc Esta on the first day of preview on Nov 3 (Picture: EdgeProp Singapore)
Already launched projects like Margaret Ville and Mayfair Gardens sold more units last quarter compared to the preceding period, as median prices in those developments dropped marginally. Meanwhile, launches that have consistently done well, such as Parc Colonial and Stirling Residences, continued to maintain prices, she adds.
The flat price trend for non-landed homes in the suburbs reflects more stable conditions in the sub-market, which is supported by more buyers for owner occupation and more affordable pricing. Mass market suburban projects like Affinity at Serangoon, Riverfront Residences, Treasure at Tampines and Parc Botannia continue to draw buyers, says Ong Teck Hui, head of research and consultancy at JLL Singapore.
Those developments saw median prices range from $1,311 psf to $1,498 psf, “which are within the comfort-zone of upgraders and those looking for a more affordable home”, he says.
2019
The latest statistics reflect a stabilising market, albeit with fluctuations in different area groups. “There has also been a widening price gap between buyers and sellers, as observed in the slowing sales of the secondary market. With sales volume thinning, we expect the fluctuations to stay,” says Knight Frank’s Tan.
Meanwhile, the “less-than-ideal” take-up rates in the recent launches are likely to nudge developers to price their projects “more sensitively” in the coming months if they want to move sales and better manage sales inventory, says Li.
Most consultants feel that it is still too premature to conclude whether prices will follow the recent downward trend. “Launch pipelines could also ease going forward as most of the bulky ones have been launched or [are] being launched,” says Song.
Property consultants expect the overall private residential price index to vary between growth of 1% y-o-y to a fall of 3% y-o-y for the whole of 2019.
Follow Us
Follow our channels to receive property news updates 24/7 round the clock.
EdgeProp Telegram
EdgeProp FacebookSubscribe to our newsletter
Search Articles