Private home prices in Singapore rose 0.9% q-o-q and 7.3% y-o-y in 3Q2021, marking an increase for the sixth consecutive quarter, according to URA flash estimates.

The price increase in the third quarter was largely driven by non-landed homes in the Rest of Central Region (RCR), which rose by 2.2% q-o-q. In the Core Central Region (CCR), prices fell 0.6%, while prices of non-landed homes in the Outside Central Region (OCR) fell by 0.2%.

“The OCR price decline is a slight surprise given the strong sales and price performance of Pasir Ris 8 at the end of July, and continued strong performance in the home sales, in particular, in the suburbs,” comments Tricia Song, head of research, Southeast Asia, CBRE.

“Prices rose at a modest pace last quarter as tightened restrictions returned in July and August. Moreover, resale and mass-market homes formed a bigger proportion of the total sales last quarter. These homes are typically sold at lower prices when compared to other market segments, thus lowering the overall average price for the entire market,” notes Sun.

“Last quarter, resale transactions accounted for more than half the total transactions (55.4%). There were also more resale transactions than new sales across all three market segments (CCR, RCR, OCR). As resale homes formed a higher proportion of transactions last quarter, the overall price index may be ‘pulled down’ by the lower transacted prices,” she explains.

Meanwhile, prices for landed properties rose 2.5% q-o-q over the quarter, compared to a 0.3% decline in the preceding quarter.

Consultants expect resale homes to continue seeing strong demand, with HDB homeowners who sold their flats proceeding to upgrade to private residential housing, while others turning to the resale market to purchase homes due to construction delays of newer developments. For the full year, CBRE Research expects private home prices to rise by 6%–8%, given the current market trajectory.