The private housing market seems to be turning a corner, data shows.
UPDATED: Private home prices fell by a marginal 0.1 percent in the second quarter of 2017, compared with the 0.4 percent drop in the previous three-month period, according to latest statistics released by the Urban Redevelopment Authority on Friday (28 July).
This is the smallest decline seen in 15 quarters, and indicates that the market is near its turning point.
Prices of non-landed properties across the island fell 0.1 percent, after remaining unchanged in the previous quarter.
The Rest of Central Region (RCR) recorded a price jump of 0.6 percent, compared with the 0.3 percent increase in the previous quarter.
Desmond Sim, Head, CBRE Research, Singapore and South East Asia, noted that price movements are strongly dependent on the location of launches during the period.
“Among top-selling projects in the RCR for the quarter, there was strong performance led by projects such as Commonwealth Towers, Artra and Principal Garden where buyers could have been encouraged by a strong value proposition,” he said.
Over in the Core Central Region (CCR), prices dropped 0.5 percent, compared with the 0.4 percent decrease in the previous quarter. Prices in the Outside Central Region (OCR) decreased 0.3 percent, compared with an increase of 0.1 percent previously.
Dr Lee Nai Jia, Head of Research at Edmund Tie & Co., said the slight decrease in the OCR reflects a mixed market.
“Some locations like Serangoon continue to be popular, and the positive sentiments are further reinforced by recent land bids and collective sales,” he said.
Separately, prices of landed properties declined 0.3 percent, compared with the 1.8 percent fall in the previous quarter.
Said Lee: “We also see a growing demand for landed properties. Given its limited supply and exclusivity, owning a landed property has been an aspiration for many Singaporeans.”
Meanwhile, private home rentals fell 0.2 percent, compared with the 0.9 percent decline in the quarter before. This is also the smallest quarterly decline over 15 quarters.
Lee noted that the leasing market seems to be bottoming out. “While rents of apartments in the OCR and RCR continue to come under pressure from new completions, rents in the CCR continue to hold up.
“Some owners are offering more upgrades and other services for a marginal increase in rent,” he said.
Moving forward, he expects home prices to remain stable for the rest of the year, but points to an increase of one to three percent in 2018.
On the other hand, rentals will come under pressure due to high vacancy rates, and this situation will likely persist till the end of 2018, he added.