If it feels like everything costs a little more with each passing year, it isn’t just your imagination. Inflation does take its toll over the years, and as 2018 passes into the annals of history, let’s take a look at how much private home prices have risen over the past 10 years.
Based on URA data, we looked at the average transacted prices of non-landed private residential properties in the new sales and resale segments across Singapore from 2008 to 2018 to find the comparison. For simplicity’s sake, we assume that all units are between 850 sq ft to 950 sq ft (the average size of a two-bedroom condo), and here’s what we found:
New sales: Projects in the East region saw the highest price increase
Between 2008 and 2018, we found that the average selling price for new projects in the East region saw the highest price increase.
In 2018, prices of a two-bedroom condo transacted at an average of $1.26 million, compared to an average of $677,768 a decade ago. This translates to a price increase of 86% in 10 years.
The price increase is likely due to the revival of suburban localities, the establishment of new growth corridors and new MRT lines in the region. Residents in the East will have more MRT links to the city and to the northern parts of the island with the upcoming Thomson-East Coast Line (TEL), which is slated to begin operation in end 2019.
This is followed by new projects in the North region, which saw a price increase of roughly 77% over the last decade, as shown in the price breakdown below:
*Assuming that all units are between 850 sq ft and 950 sq ft
Source: URA, EdgeProp.sg
Resale properties in the North and the West saw the highest price appreciation
Between 2008 and 2018, resale prices for properties in the North and the West regions saw the highest increase, at about 72% over the last decade respectively.
In 2008, a resale two-bedroom condo in the North transacted an average of $473,173. In 2018, a similar-sized unit transacted at an average of $812,313.
Meanwhile, a resale two-bedder condo in the West transacted at an average of $564,480 in 2008, and $969,176 in 2018.
This is followed by resale prices of private properties in the Central and North East regions, which saw respective price increases of 68% and 66% over the last decade, as shown in the price breakdown below:
*Assuming that all units are between 850 sq ft and 950 sq ft
Source: URA, EdgeProp.sg
How will the new property cooling measures impact housing prices?
In July, the government stepped in to cool the red hot residential property market by introducing a fresh round of cooling measures, which included higher Additional Buyer’s Stamp Duty (ABSD) rates.
With the new property curbs, Singaporeans buying their second property will now pay 12% ABSD from the previous 7%. Singapore PRs will pay a 15% ABSD from the previous 10% when they purchase a second property, while foreigners will pay a 20% ABSD from the previous 15%.
The cooling measures also introduced tighter loan-to-value (LTV) limits, a move that affected first-time homebuyers the most, primarily because the LTV limit has been reduced to 75% from 80%.
This is reflected in the significant decline in new home sales in August, which fell 64.3% from the previous month, and 50.6% compared to a year ago.
However, developer home sales in September saw a 51% increase from the previous month, due primarily to strong response at the launches of JadeScape and Mayfair Gardens.
Demand for high-end properties in the Core Central Region (CCR) has also demonstrated resilience despite the property cooling measures.
In the long run, home prices are expected to hold steady despite the cooling measures as there is currently no oversupply in the market. Continued buying activity also suggest that there is both liquidity and pent-up demand for residential units in the market.