Price recovery gathered momentum in 1Q2018, rising 3.1% over 4Q2017, according to URA flash estimates. This marks the third straight quarter of price growth since the index bottomed in 2Q2017. It is also the strongest quarterly increase since the 5.2% q-o-q spike in 2Q2010, says Tricia Song, Colliers International head of research for Singapore.
With the latest price uptick, the URA private property price index is up 4.6% y-o-y, adds Song. As at end-1Q2018, private residential prices are just 7.5% below the peak in 3Q2013.
The largest price uptick was seen in the Core Central Region (CCR), which registered a 5% increase, boosted by new launches over the past year, such as Gramercy Park, Martin Modern and New Futura. Prices of Gramercy Park, for instance, registered a median price of $3,177 psf in 1Q2018, up 9.5% from the $2,902 psf in 4Q2017. Martin Modern also saw its prices climb steadily, up 14.8% from $2.354 psf in 4Q2017 to $2,703 psf in 1Q2018, says Colliers.
Martin Modern saw prices increase 14.8% q-o-q from $2.354 psf in 4Q2017 to $2,703 psf in 1Q2018 (Credit: GuocoLand)
Resale prices in some districts have also risen because of the high land rates implied from the recent collective sales in the Bukit Timah, River Valley and Holland Road neighbourhood. “We think the high-end homes segment has turned a corner, following a price slump since June 2013,” says Song. Her forecast is that prices in CCR could rise 10% in 2018.
The URA flash estimates also showed a 3.8% increase in prices in the Outside Central Region (OCR) or suburbs. Demand for OCR homes is attributed to their affordability and supported by the largest pool of buyers, says Ong Teck Hui, JLL national director for research and consultancy.
According to JLL, OCR transactions accounted for about 50% of total transaction volume in 1Q2018, while CCR and Rest of Central Region (RCR) accounted for 18% and 31% respectively. Projects in OCR that registered price increases include Grandeur Park Residences at Tanah Merah in the east, which saw a 7.8% q-o-q increase in average prices from $1,416 psf in 4Q2017 to $1,526 psf in 1Q2018. Likewise, Symphony Suites in Yishun registered a 3.9% increase in average prices from $1,046 psf in 4Q2017 to $1,087 psf in 1Q2018. Other projects in OCR with firm average pricing include Kingsford Waterbay ($1,379 psf) and Parc Botannia ($1,283 psf).
Crowd at The Tapestry, where average price of units sold was $1,310 psf (Credit: City Developments)
Developers have also been pricing their properties higher; for example, The Tapestry in Tampines was launched on March 24 at an average price of $1,310 psf. Neighbouring MCC Land’s The Alps Residences was launched in October 2016 at an average price of $1,089 psf. This a 20% increase in price in less than two years, notes Eugene Lim, ERA Realty’s key executive officer.
“Having witnessed three consecutive quarters of price increases thus far, it is a clear sign of positive sentiments in the residential property market, despite almost all the cooling measures still in place,” says Nicholas Mak, ZACD Group executive director. “This would have a positive impact on property prices, and the private residential price index is expected to rise 8% to as much as 15% in 2018.”
This article appeared in EdgeProp Pullout, Issue 825 (April 9, 2018).