We all know that Singapore’s private residential property market is picking up, following a second consecutive quarterly increase in the period ended December 31, 2017. So which districts showed the highest growth in the past year?
For answers, we looked at the median psf prices for resale transactions involving non-landed residential properties within each district for the 12 months of 2017, and compared them to similar transactions that took place within the same time period in 2016.
Top 10 districts with the highest psf growth in 2017
Source: URA, EdgeProp
Below are some possible growth drivers:
1) Price recovery at Sentosa Cove condos
Singapore’s district 4, which covers Sentosa Cove, Keppel Bay, Telok Blangah and Mount Faber, has seen a pickup in property prices and transaction volumes in 2017 and this is reflected in its massive annual growth of 19.16%.
Median psf price of private non-landed homes in the upscale district rose from $1,284 in 2016 to $1,530 in 2017, and is catalysed primarily by the price recovery at Sentosa Cove condos.
In an earlier interview, Alice Tan, director and head of consultancy and research at Knight Frank Singapore, noted that overall prices for condos at Sentosa Cove had recovered by 15.9% from 1Q2017 to 3Q2017, to an average of $1,593 psf. Within the same period, transaction volume surged 180% to 31 units, compared with 11 in the first nine months of 2016.
The recent exuberance in the private residential market, as well as record land prices achieved in government land sales and collective sales has spurred prices of Sentosa Cove properties, Tan said. “Coupled with the prestige, exclusivity and high quality of Sentosa Cove properties, homebuyers are returning to secure non-landed homes on the island,” she added.
2) Possible uplifting effects from new launches
Newer and more luxurious developments can have an uplifting effect on the overall value of surrounding properties, our previous study showed.
In district 4, the advent of Corals at Keppel Bay, which obtained its TOP in 2016, appears to have had a positive impact on prices of nearby projects in the Keppel area.
Activity at the 366-unit project accounted for the bulk of new sale transactions in district 4 in 2017.
According to URA data, median $psf prices at Corals rose from $1,897 in 2016 to $1,901 psf in 2017. The upswing in prices may have spilled over to the nearby 969-unit Caribbean at Keppel Bay (located 259m away) and the 1,129-unit Reflections at Keppel Bay (600m away).
For instance, median $psf prices at Caribbean rose from $1,469 psf in 2016 to $1,505 in 2017.
Meanwhile at Reflections, median $psf price went up from $1,577 in 2H2016 to $1,638 in 2H2017. The development also observed a spike in sales transaction volume within the same time period, from 11 units in 2H2016 to 74 units in 2H2017.
New projects in district 20 (Bishan, Ang Mo Kio) could have yielded a similar effect on prices of surrounding properties, especially considering that new sale transactions involving these projects accounted for about 17% of overall sales transactions within the district in 2017.
As a whole, median $psf prices of non-landed private homes in district 20 – which achieved an annual growth of 16.61% in 2017 – increased from $1,020.50 psf in 2016 to $1,190 psf in 2017.
In comparison, new projects, which include 183 Longhaus, Adana@Thomson and Thomson Impressions transacted at median psf prices of between $1,600 and $1,630 in the past year.
However, while new launches could have possible uplifting effects on overall property prices, they are not a determining factor and home prices are ultimately still determined by the forces of demand and supply. As such, aspiring homeowners should look at not just the present state of local amenities but also the future prospects for commercial and governmental development in an area.
3) En bloc domino demand
The ongoing momentum from collective sales and greater scope of foreign participation have powered the high-end segment, and this is reflected in the high median psf growth within prime districts 10 (Ardmore, Bukit Timah, Holland Road, Tanglin) and 11 (Watten Estate, Novena, Thomson), which achieved an annual growth of 12.78% and 8.64% respectively in the past year. Meanwhile, district 2 (Anson, Tanjong Pagar) in the Downtown Core hit an annual growth of 10.47%.
The wave of recovery is driven by replacement demand from buyers who have sold their homes in collective sales, and heightened demand from foreign buyers who are drawn to prospects of a pickup in property prices and better leasing environment.
In addition, private residential properties are considerably cheaper in Singapore as compared to other gateway cities such as Hong Kong and Shanghai. Most buyers who are NPRs purchased luxury condos in the prime districts or close to the Central Business District (CBD).