4Q2020 private home prices up 2.1%, point to new high: URA flash estimate

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/ EdgeProp Singapore
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January 4, 2021 7:23 PM SGT
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SINGAPORE (EDGEPROP) - Initial estimates from the URA showed that overall private home prices rose by 2.1% in 4Q2020. This is the highest quarterly increase since 2Q2018 when prices rose by 3.4%.
It brings the full-year price increase for 2020 to 2.2%, marking the fourth straight year of price increase, says PropNex. Based on the 4Q2020 flash estimate, the URA private residential property index (at 157 points) is now about 1.6% above the recent peak in 3Q2013 (154.6 points).
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Not all real estate regions enjoyed price expansion in the last three months of 2020, notes Nicholas Mak, head of research & consultancy, ERA Realty. The non-landed housing price index expanded 3.2% q-o-q in 4Q2020, led by a 4.8% q-o-q growth in non-landed prices in the Rest of Central Region (RCR). The landed housing price index contracted 2.1% q-o-q over the same period.
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The Core Central Region (CCR) registered a 3.3% price growth, while home values in the Outside Central Region (OCR) climbed by 1.7% in 4Q2020, according to the URA flash estimate.
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The Avenir sold 18 units in 4Q2020 at a median price of $3,140 psf, compared to 18 units sold at a median price of $3,244 psf in 1Q2020, when it was launched (Photo: Samuel Isaac Chua/EdgeProp Singapore)

CCR: Recovery in 4Q2020

Despite the 3.3% increase in 4Q2020, the CCR was the only region that ended the year with a very marginal 0.2% yearly decrease, while the RCR and OCR were up by 5.1% and 3.1% respectively, says Leonard Tay, Knight Frank Singapore head of research.
However, CCR staged a strong rebound in 4Q2020, reversing the 3.8% drop in 3Q2020, despite the absence of major new launches during the quarter, says Ong Teck Hui, JLL senior director of research & consultancy. “This could be due to the CCR underperforming in 2020 as its index fell 3.4% in the first three quarters, so the lower prices could have attracted buyers and contributed to the price increase in 4Q2020,” says Ong. “The rise in the CCR index was accompanied by an increase in the proportion of high value transactions of $2,700 psf and above during the quarter.”
CCR home price index is now 2.9% below its recent peak in 3Q2018 and 5.2% below its all-time peak in 1Q2013, says Tricia Song, Colliers International’s head of research for Singapore.
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While there were sporadic secondary market transactions at below-market prices during the year, prices in the CCR appear to have recovered as sentiment improved towards the end of the year, notes Song.
Ongoing launches which have offered some discounts during the year, also saw steady interest in 4Q2020: Leedon Green recorded 29 caveats in 4Q2020 at a median price of $2,686 psf, compared to 41 units sold at $2,789 psf when it was launched in January 2020. In 4Q2020, 8 Saint Thomas recorded 12 caveats at a median price of $2,788 psf compared to earlier units sold at $3,100–$3,200 psf.
Fourth Avenue Residences sold 24 units in 4Q2020 at a median price of $2,295 psf, compared to its 2019 average launch price of $2,400-2,450 psf.
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The Avenir sold 18 units in 4Q2020 at a median price of $3,140 psf, compared to 18 units sold at a median price of $3,244 psf in 1Q2020, when it was launched.
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In 4Q2020, JadeScape sold 73 units (Photo: Qingjian Realty)

RCR: Best performer, above peak in 2Q2013

RCR was the best performer among the three non-landed market segments, even though it saw the steepest decline in transaction volume in 4Q2020, compared to CCR and OCR, notes JLL.
Having risen 2.5% in 3Q2020, followed by 4.8% in 4Q2020, RCR home prices rose to a full-year increase of 5.1%, the highest among all segments. “It is now at an all-time peak, at 3.6% above the peak in 2Q2013,” points out Colliers’ Song.
JLL attributes the 4.8% spike in the index for non-landed homes in RCR partly to new launch prices at The Linq @ Beauty World, where 119 units were sold at a median price of $2,171 psf; and The Landmark, with 108 units taken up at a median prices of $2,137 psf.
Another new launch in the RCR that saw strong sales was Forett at Bukit Timah, with 70 units sold at a median price of $1,941 psf. Large projects above 1,000 units, launched in 2018, such as Parc Esta, Stirling Residences and Jadescape saw sales of 13, 44 and 73 units respectively in 4Q2020, observes Colliers International. “Their prices have inched up as they sold down their inventory,” notes Song.
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Florence Residences sold 46 units at a median price of $1,635 psf in 4Q2020 (Photo: Samuel Isaac Chua/EdgeProp Singapore)

OCR: Resilient prices

Prices remained resilient in the OCR non-landed segment, which saw an increase of 1.7%, similar to that in the previous quarter. JLL attributes it partly to new launches such as Clavon and KI Residences At Brookvale. Clavon managed to sell 471 units at a median price of $1,637 while KI Residences At Brookvale moved 165 units at a median price of $1,766 since their launches.
Earlier launches such as Florence Residences sold 46 units at a median price of $1,635 psf in 4Q2020, compared to 168 units at $1,559 psf in 3Q2020. Treasure at Tampines moved 119 units at $1,419 psf in 4Q2020, compared to 326 units at $1,359 psf in 3Q2020, says Colliers’ Song.
“Looking at the numbers, I would say the residential property market - both public and private housing – turned in a blockbuster performance in 4Q2020 given all the challenges amid the global pandemic and the economic downturn,” says Ismail Gafoor, CEO of PropNex. “We believe the property market has emerged relatively unscathed in this crisis thanks to the various rounds of cooling measures which have eradicated real estate speculation and encouraged households to be more prudent in their property purchases.”

2021 forecast: Price growth 2-3%

PropNex expects home prices to continue inching up by 2% to 3% in 2021, given the improving market outlook and diminishing supply of units. In addition, with the firm land price for sites and higher construction cost, there is little headroom for developers to cut prices, points out Gafoor. “We expect the sales momentum of private homes to remain intact, backed by the ample liquidity in the market as well as the benign interest rate environment,” he continues. “In addition, we could potentially see more foreign buyers returning to the market should there be any further easing of travel restrictions.”
Discover more about the Leedon Green, best selling freehold project in prime District 10 here
For price trends, recent transactions, other project info, check out these projects' research page: Fourth Avenue Residences, Leedon Green, The Avenir, The Linq, Forett at Bukit Timah, Parc Esta, Stirling Residences, JadeScape, Ki Residences, Florence Residences, Clavon, 8 Saint Thomas, The Landmark

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