Singapore Private Home Prices At New High

New private home sale prices in Singapore went up by 2.1% in the 4th quarter of 2020, from the 3rd quarter. This marked their biggest quarterly rise in more than two years.

Based on the figures released by the URA (Urban Redevelopment Authority) yesterday, the price index for the entire 2020 showed an increase of 2.2%, which is slightly lower than the 2.7% rise for 2019.

Ms Tricia Song, Colliers International research head, observed that private residential prices are now 1.6% higher than their all-time high in the 3rd quarter of 2013, and 4.9% above their most recent peak in the 3rd quarter of 2018.

In view of the latest figures, Deputy Prime Minister Heng Swee Keat said this week that the government is paying “close attention” to the residential property market to “ensure that it remains stable”.


The Last Quarterly Uptrend

The rise in the last quarter was driven mainly by non-landed homes in the CCR (Core Central Region) and RCR (Rest of Central Region).

Non-landed housing prices grew by 3.2% in the CCR, effectively reversing their 3.8% fall in the previous quarter. This looked to have been due to higher median prices at projects launched previously, according to Ms Wong Siew Ying, the head of content and research at Propnex.

Whereas prices in the city fringe or RCR, climbed even higher by 4.4% from their 2.5% increase in the previous quarter. Ms Wong noted that new recent launches such as at The Landmark and Linq @ Beauty World kept the prices up.

This recent uptrend augurs well for upcoming launches such as Midtown Modern at Bugis, and One-north Eden at one-north Gateway in Buona Vista. Both Midtown Modern and One north Eden are looking to launch in the first quarter of 2021.

Similarly prices in the suburbs or OCR (Outside Central Region) locked in a 1.8% gain, a tad higher than the 1.7% in the last quarter. Ms Wong observed that new launches in December, at Ki Residences at Brookvale and Clavon in Clementi, had helped to drive growth in the mass market segment.

The 660-unit Ki Residence sold at a median of SGD$1,766 PSF while 640-unit Clavon’s median stood at SGD$1,637 PSF, higher than the prevailing OCR prevailing rate of $1,632 PSF.

OrangeTee & Tie’s head of research and analytics, Ms Christine Sun, commented that the recent uptick was expected, in light of several projects raising their prices in the last quarter.

Excluding ECs or executive condominiums, developers moved 2,603 units in the last quarter of 2020. This is 26% less than the 3,517 units sold in the previous quarter.

Notwithstanding the drop, the 2020 last quarter was the best performing October to December period since 2012, when 4,353 units found a buyer in the primary market. Before the current COVID pandemic, the last two months of the year when many people were vacationing overseas, was generally a lull period for sales.


Overall for 2020

For the whole of 2020, overall non-landed home prices rose 2.2%, slightly less than the 2.7% increase in 2019. Prices of landed homes grew 1.2% in 2020 with a contraction of 1.6% in the last quarter.

Mr Nicholas Mak, ERA’s head of research and consultancy, highlighted that after the TDSR came into effect in June 2013, private home prices had fallen till the 2nd quarter of 2017. It took over seven years till the 4th quarter of 2020 for private housing prices to claw back the losses arising from the 2013 and subsequent rounds of cooling measures.

The full year total for developer private home sales in 2020 was 9,982, excluding ECs. This is higher than the 9,912 units sold in 2019. Considering the Covid-19 travel restrictions and lockdowns, last year’s demand was unexpectedly strong.


Expectations for 2021

Ms Song from Colliers expects private home prices to track growth in the economy and rise 3 to 5% in 2021. She noted that, “The positive momentum of the sales and price index could continue in 2021, but the spectre of more cooling measures – if prices outpace economic fundamentals – is likely to temper that momentum.”

Supply in the pipeline, that is new redevelopment or development projects, continue to shrink. In 2019, there were a total of 32,272 units (inclusive of ECs) unsold, that had obtained planning approval. This number dwindled to 28,727 at the end of September 2020, and by end-December 2020, dropped further to 26,426 units.

Ms Sun commented that the market could swing back in favour of sellers in 2021, as housing stock continues to deplete in the face of strong demand and a sharp fall in land sales in recent years.

The upcoming launches this year are mostly in the RCR and CCR sectors, such as One-north Eden, Irwell Hill Residences, One Bernam, and Midtown Modern. Mr Sim from CBRE noted that this will limit the pool of potential buyers and could lead to a drop in total new private housing sales to about 8,000 to 9,000 units for 2021.

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Source: The Business Times . 23 January 2021