SINGAPORE (Oct 1): Singapore’s private residential property index has increased by 1.4 points from 150.8 points in 2Q19 to 152.2 points in 3Q19, representing a 0.9% increase, compared to a 1.5% increase last quarter.
The data is part of the flash estimate of the price index for private residential property for 3Q19 released by the Urban Redevelopment Authority (URA) on Tuesday.
The report also showed that prices of non-landed private residential properties grew by 2.9% in the core central region (CCR), compared to a 2.3% increase in the previous quarter. The rest of central region (RCR) saw prices increase by 1.6%, compared to a 3.5% increase in 2Q19.
Meanwhile, non-landed private properties in the outside central region (OCR) increased by 0.7% from a 0.4% increase in the last quarter.
According to OrangeTee, this slower pace of price increase is within expectation, and possibly because most developers and sellers of resale homes have kept prices at attractive levels to clear their existing stock.
“While the housing market may continue to be influenced by global forces in the wider economy, our robust population growth, rising household income, and positive employment numbers will remain key drivers for both home prices and demand over the long term. In view of the current economic uncertainties, Singapore will remain an attractive safe haven for foreign investors to park their funds here,” adds Christine Sun, head of research and consultancy at OrangeTee.
Ismail Gafoor, CEO of Propnex Realty says, “The marginal growth in prices and the renewing buyer’s confidence can be attributed to a combination of factors. This include, the greater demand for newly launched projects, the higher land bid prices by developers and the trend-setting prices by newer projects. This has essentially, led to the overall price increment. We believe that the year will end on a strong note, with price index reaching about 2 to 2.5%.”
Additionally, the Housing Development Board (HDB) today announced its flash estimate of the resale price index (RPI) for 3Q19, which came in at 130.9, an increase of 0.1% from 2Q19. This is the first uptick since 2Q18. For the first three quarters of this year, prices have dipped 0.4%.
This price rebound is in line with market sentiment, after the government announced a string of policy changes, such as increasing the CPF allowance to purchase HDB flats, enhancing housing grants for first-time buyers and raising the income ceiling for eligible buyers.
HDB also said that it will be offering about 4,500 Build-To-Order flats in Ang Mo Kio, Tampines and Tengah in November 2019. In February 2020, HDB will offer about 3,000 BTO flats in Sembawang and Toa Payoh.
“With the recent initiatives introduced by the government on September 10, such as the New Enhanced CPF Housing Grant (EHG) and the raising of the monthly household income ceiling, we can expect to see a rejuvenation in the HDB resale segment paving way towards a positive growth in the coming quarters,” says Gafoor.
“We are expecting resale prices to remain flat for the remainder of the year. However, we are anticipating the volume of transactions to likely exceed 24,000 for the year. Subsequently, we can anticipate a positive growth in prices, in the tune of 1 to 2% for the year 2020,” he adds.
Similarly, OrangeTee does not expect a dramatic price rebound in the coming months as competition for potential buyers may intensify with the increasing supply of flats reaching their five-year Minimum Occupation Period.
“However, we have adjusted our price projection from between -1 and -2 per cent to 0 to -1 per cent for the whole of this year,” says OrangeTee, who is also estimating between 22,000 and 24,000 resales transactions to be inked this year.
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