Private residential prices fall again in 1Q2019, by 0.7%

/ EdgeProp
April 26, 2019 6:14 PM SGT
Private home prices declined by 0.7% in 1Q2019, according to the latest statistics from the URA. This compared to the 0.6% decline as shown by its flash estimate.
This is the second consecutive quarter that private residential prices have fallen; they declined by 0.1% in 4Q2018. Private home prices are now 0.7% below the most recent price peak in 3Q2018, and 3.9% below the record high in 3Q2013, says Tricia Song, head of research for Singapore at Colliers International.
New sales
New home sales for the first three months of this year were at 1,838 units, little changed from 1,836 units sold in 4Q2018. This was 16% higher y-o-y due to more attractive new project launches. “About 70% of new private home sales comprise projects that have been previously launched. Developments that are priced sensitively have continued to garner interest among buyers and investors,” says Ismail Gafoor, CEO of PropNex Realty.
Meanwhile, private resale transactions fell by 5.7% q-o-q, or 49.3% y-o-y, to 1,858. “Sellers might be pulling the brakes, and buyers are potentially holding off the decision of buying,” says Gafoor. But a revitalised showing is expected for the coming three quarters, as en-bloc beneficiaries look for replacement homes with their sales proceeds, he adds.
The latest decline was led by a price drop of 3.0% in the city centre, or Core Central Region (CCR), as well as a 0.7% decline in city-fringe areas, or Rest of Central Region (RCR). Prices in the suburbs grew moderately at 0.2% compared to their 0.7% gain in 4Q2018, says Leong Boon Hoe, COO of List Sotheby’s International Realty Singapore.
There is strong demand for properties priced below $2 million as well as relatively healthy interest for properties priced above $5 million, which are luxury homes by industry standards, he says. Some of these projects are 3 Orchard-By-The-Park, South Beach Residences, and Boulevard 88. “This shows that there are buyers who are keen to enter the market for good developments, despite the higher ABSD (additional buyer’s stamp duty),” says Leong.
The 1Q2019 price decline in the CCR is the sharpest recorded for the segment since the 5.2% fall in 2Q2009 following the Great Financial Crisis in 2009, says Song. This is also the second consecutive quarterly price decline in the CCR, which is now 4.0% below its most recent peak in 3Q2018.
This quarterly result is “much steeper than our expectation”, says...