Private home prices in 4Q2018 fall 0.1% q-o-q, but overall prices in 2018 rise 7.9%
By Timothy Tay
/ EdgeProp |
According to URA flash estimates, the private residential property index fell 0.1% q-o-q in 4Q2018 after climbing 0.5% in 3Q2018, meanwhile prices increased by 7.9% for the whole of 2018, compared with the 1.1% increase in 2017. It is the first quarterly decline since 2Q2017, says Christine Sun, head of research and consultancy at OrangeTee & Tie. The recent property cooling measures and global growth concerns amid rising trade and financial risks have continued to weigh on the private residential market during the period in review, she says.
In the Core Central Region (CCR), prices of non-landed private residential properties fell by 1.5% last quarter, after rising 1.3% in 3Q2018. While prices in the Rest of Central Region (RCR) and Outside Central Region (OCR) increased by 1.8% and 0.8% respectively, after registering decreases of 1.3% and 0.1% in 3Q2018.
In 2018, overall prices in the CCR, RCR, and OCR increased by 6.2%, 7.4%, and 9.5% respectively.
Credit: URA
The increase in prices in the RCR and OCR was possibly supported by recent launches, such as Parc Esta, Whistler Grand, and Kent Ridge Hill Residences. In contrast, there were fewer transactions from new launches in the CCR segment to boost prices, says Tan Tee Khoon, head of residential project marketing at Knight Frank Singapore.
The price indexes of the three main regions have also reverted back or rose higher than their pre-measures levels in 2Q2018. “This indicates that prices have stabilised, five months after the property cooling measures,” says Sun. But current market conditions will likely limit the pool of potential buyers “to those with relatively large financial resources and first-time home-owners,” she says.
Buyers will have plenty of options in the market this year as sales of new launches could range from 9,500 to 11,000 units, says Lee Sze Teck, head of research for Huttons Asia. He estimates that 20% are located in the CCR, 30% in the RCR, and the rest (50%) are in the OCR. Upcoming projects include Fourth Avenue Residences, RV Altitude, One Meyer, 35 Gilstead and Fyve Derbyshire.
Credit: URA
Prices at these upcoming launches are unlikely to dip significantly, as developers bought those land parcels at relatively high prices during the recent collective sale cycle. “We expect prices to continue stabilising, possibly rising at a slower pace of 1% to 3% for the whole of 2019,’ says Sun.
Looking ahead, the price index is expected to remain largely stable, but may be dragged down by declining resale prices of older developments, says Tan. “Prices for non-landed homes, especially older developments in the resale market, are likely to decline under the pressure of slower demand and a plethora of options in the primary market”, he says.
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