Overall prices of private homes in Singapore rose for the first time in nearly four years after it edged up by 0.7 percent in Q3 2017 compared with the 0.1 percent dip in the prior quarter, according to the latest statistics from the Urban Redevelopment Authority (URA).
In particular, non-landed properties recorded a 0.6 percent uptick in prices versus a 0.1 percent slide in Q2 2017, while landed homes posted a gain of 1.2 percent from a drop of 0.3 percent previously.
Non-landed homes in the Outside Central Region (OCR) saw the highest growth of 0.8 percent, reversing the 0.3 percent fall in the preceding quarter. That the Rest of Central Region (RCR) rose by 0.5 percent, extending the 0.6 percent increase in the second quarter, while that in the Core Central Region (CCR) edged up by 0.1 percent compared to 0.5 percent decline previously.
“While the private residential market tends to be slower in Q3 due to the Chinese seventh month, the uptick in prices suggests that the market has bottomed out,” said Edmund Tie & Co’s Research Head Dr Lee Nai Jia.
Moreover, rents of private homes across the city-state were flat compared to a 0.2 percent fall in the preceding three-month period.
Specifically, rentals of non-landed properties dipped by 0.1 percent versus 0.2 percent drop in Q2 2017, while that for landed houses edged up by 0.6 percent from a slide of 0.1 percent previously.
Non-landed homes in RCR posted the largest increase in rents of 0.9 percent versus a 0.4 percent drop in the prior quarter. On the other hand, that in OCR dipped by 0.3 percent compared to a 0.6 decline, while that in CCR fell by 0.8 percent versus a 0.1 percent slide previously.
According to JLL’s National Director for Research & Consultancy Ong Teck Hui, these could indicate that the housing rental market is beginning to bottom but vacancy remains high at 8.4 percent in Q3 2017 compared to 8.1 percent previously.
“Some owners have withdrawn their units from the leasing market prompted by the turnaround in prices in the sales market. This could have reduced leasing options for some tenants and have a positive impact on rents.”
Excluding executive condominiums, URA data show that developers launched 1,183 houses during the quarter, down from 2,011 units in Q2 0217. Their sales of private homes also declined to 2,663 units from the 3,077 units previously.
But private home sales in both the primary and secondary market surged by 56.8 percent year-on-year to 18,800 units during first three quarters – the highest level in five years, Ong noted.
“As the market recovers, secondary market sales have been growing more significantly. For the first nine months of this year, 10,098 secondary market transactions were recorded, a 59.3 per cent increase year-on-year and it comprised 53.7 percent of the total sales volume, compared to 52.8 percent in 2016 and 46.5 percent in 2015. 8,702 units were sold on the primary market in the first three quarters, a 53.9 per cent year-on-year increase.”
Moving forward, Ong thinks that more buyers may turn to the resale market, as developers hold back launches as home prices recover.
Meanwhile, Edmund Tie & Co’s Dr Lee believes that Singapore’s private housing sector will likely continue its rebound unless there are external shocks or policy changes that disrupt the market.
This article was edited by Keshia Faculin.