Every quarter, the Urban Redevelopment Authority (URA) will release its so-called flash estimate of the private residential property price index, known as the URA flash estimate.
This property price index reflects the broad price trends in Singapore’s private residential market and provides an indication of how the prices of private residential properties have changed over the past quarter.
How is the URA flash estimate property price index calculated?
The property price index is calculated by using property transactions that took place in the quarter.
Step 1: Each property transaction is grouped according to property type, completion status, region, proximity to MRT, size and age of the property.
Step 2: A baseline is calculated using the past 12 quarters’ moving average to get the median price for each property group.
Step 3: The median price for each property group is calculated for property transactions that took place in the current quarter.
Step 4: Take median price for each property group in the current quarter (output from step 3) and divide it against the baseline median price of each property group using past 12 quarters’ moving average (output from step 2).
If you want to know the change in property prices, simply compare the price index for the current quarter with the previous quarter. For instance, in 4Q2019, the property price index was 153.60. In the next quarter (1Q2020), the index was 152.1. Based on the price index, private property prices fell by 0.1% in Singapore in 1Q2020 compared with the previous quarter.
The URA flash estimate also breaks down the price changes in Singapore’s three regions (OCR, RCR and CCR), as well as the price index for both landed and non-landed private properties across Singapore.
Check out this article to find out the various Districts located in the CCR, RCR and OCR.
What else can I find out from the URA flash estimate?
Apart from private property prices, the flash estimates also provide the rental index for private properties (which is basically rental prices), the number of private property launches and sales by developers, resale and sub-sale transactions, and unsold properties in the pipeline, among others.
How often is the URA flash estimate published?
As previously mentioned, the URA flash estimate is published every quarter. It is usually released at the start of the month following the end of the quarter. For example, if the quarter ends in March 2020, the URA flash estimate property price index will be released in the first week of January 2020.
As the name suggests, the URA flash estimate property price index is not the finalised value (hence it’s called an estimate). That’s because there are also transactions taking place near the end of the quarter which aren’t factored into the URA flash estimate. A more comprehensive statistics of the property price index is usually released closer to the end of the quarter.
How to interpret the data from the URA flash estimate
So, what does the URA flash estimate mean for you, be it whether you are a potential property buyer or seller?
The URA flash estimate is a good gauge of the current property buyer sentiments. If the URA flash estimate shows that the property price index is climbing rapidly, it means that buyers and sellers are optimistic about the prospects of the property market. This is a good sign for sellers because the optimism in the property market makes it a sellers’ market.
On the contrary, if the URA flash estimate shows that property price index is declining, it is a sign of pessimism in the property market. This could be a result of reduced demand or oversupply of sellers, leading to a buyers’ market where buyers have more bargaining power to influence the selling price.
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