The overall price index for non-landed private homes has climbed 2.6 percent in May compared with the previous month, according to the newest flash estimates released by the National University of Singapore (NUS). The index has appreciated 8.6 percent since the end-2009.
The Singapore Residential Price Index (SRPI), which is compiled by the NUS Institute of Real Estate Studies, covers completed properties.
The sub-index for the central region, which covers properties in postal districts 1–4 and 9–11, rose 2.5 percent in May over the earlier month, and 7.9 percent year to date.
The sub-index for the non-Central region grew 2.6 percent month-on-month in May and 9.1 percent year to date.
Developers’ sales have slowed down since last month, as the European economic crisis affected financial markets. The market is likely to go into a consolidation phase, characterised by slower sales as property developers struggle to maintain prices and hold back the purchases of potential customers, in hopes of price cuts.
Meanwhile, the URA is set to release its Q2 flash estimate for the official private home index. The index grew 5.6 percent in Q1 over the previous quarter. Property consultancy firm CB Richard Ellis (CBRE) predicted a two percent to three percent quarter-on-quarter growth in the index for Q2. URA’s index takes into account both uncompleted and completed properties, including new launches in the market.
“The price points of new mass-market projects launched in the second quarter were at similar levels to those launched in the previous quarter, but those in the mid-tier segment (city-fringe locations and landed homes) have inched up slightly,” said CBRE.
Mr. Joseph Tan, executive director for residential at CBRE, forecasted that home prices are expected to remain stable though he predicted that new private home sales will slow to around 2,000 units in Q3 from an estimated 4,380 units in Q1 and 4,000 units in Q2.
“Home prices are likely to stay stable given the positive outlook on the economy and strong boom in manufacturing and exports,” said Mr. Tan.
According to CBRE’s estimates, developers sold around 600 to 700 private homes this month, compared with 1,078 units in May and 2,207 homes in April.
Property developers have sold an estimated 8,300 units in H2 2010, compared with 14,688 new homes in 2009.
Commenting on Q2 sales in the primary market, CBRE said: “The projects that sold well were mostly in the low to mid-tier price range. Sales of new upmarket homes moved at a slower pace in the second quarter as foreign investors held back their purchases due to the weakening of some foreign currencies against the Singapore dollar.”
Based on caveats lodged, the share of new private home purchases of HDB upgraders dropped to 33.7 percent in Q2 from 37.9 percent in Q1. “The reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter compared to the first quarter,” it added.
The overall SRPI of NUS is now 36.1 percent above the post-financial crisis low in March 2009. Over the same period, the growth for the non-central region has been 33.2 percent and 41.7 percent for the central region.