Private residential prices see first decline since 2Q2017

The overall residential price index for private residential properties saw its first decline last quarter after five consecutive quarters of recovery since 2Q2017. Prices fell by 0.1% q-o-q, compared to a 0.5% q-o-q increase in 3Q2018, showed the latest URA statistics. This decline is “unsurprising” considering the combined impact of the July property cooling measures and revised guidelines introduced over 2H2018, says Desmond Sim, CBRE’s head of research, Singapore & Southeast Asia.
For the whole of 2018, prices of private residential properties rose by 7.9% y-o-y, compared to the 1.1% y-o-y increase recorded in 2017. The price increase last year is likely attributed to sales during the first half of the year, says Christine Sun, head of research and consultancy at OrangeTee & Tie. “(At the time) many new homes were sold at relatively high prices on the back of the market exuberance seen in the latest collective sales cycle,” she adds.
Credit: URA
For the whole of 2018, both the landed and non-landed sectors of the property market recorded increases in overall prices. For the whole of 2018, prices of landed properties rose by 6.3% y-o-y, while non-landed properties recorded an 8.3% y-o-y price increase. However, landed home prices are still 9.1% below their peak in 2013, says Tricia Song, head of research for Singapore at Colliers International.
The price growth recorded this year was largely fuelled by a pent-up demand for private homes, attractive new launches, and a more positive economic outlook for the local economy, she says. “However, we do not expect private home prices to continue to rise rapidly in view of the new property curbs implemented last July,” she adds.
Landed properties and CCR prices fall
The prices of landed properties fell by 2.0% q-o-q last quarter, and property prices in the city centre, or Core Central Region (CCR), declined by 1.0% q-o-q. This is compared to 3Q2018, which saw a 2.3% q-o-q drop for landed properties and 1.3% q-o-q increase in CCR property prices. The 4Q2018 decline in CCR prices is likely to have stemmed from resale transactions as prices in luxury developments like 8 Saint...