The property market continues to be driven by high demand from buyers, robust en bloc activity and confident land bids by developers, said PropertyGuru.
Private home prices in Singapore continued to grow in Q2 2018 with a 3.4 percent increase from the previous quarter, according to flash estimates of the Urban Redevelopment Authority’s price index released on Monday (2 July).
“This is the fourth consecutive quarter of increase in the URA Property Price Index since Q3 2017 and following the 3.9 percent increase in Q1 2018,” said Eugene Lim, key executive officer at ERA Realty.
He also noted that private home prices increased by an estimated 7.4 percent in the first half of 2018.
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URA data shows that all segments of the market registered positive price changes in Q2, with the Core Central Region witnessing a 1.4 percent increase, the Rest of Central Region (5.7 percent) and the Outside Central Region (2.9 percent).
PropertyGuru’s chief business officer Lewis Ng said this is line with the latest PropertyGuru Property Index, which saw asking prices rise for the fourth straight quarter, by 3.4 percent to 102.6.
“The property market continues to be driven by high demand from buyers, robust en bloc activity and confident land bids by developers,” he said.
With market sentiment still very positive, ERA’s Lim believes the continued increase in prices “signals that the market is on an upswing trend”.
He said more buyers “are buying now for fear of further price increases going forward”, while sellers have taken this opportunity to revise their asking prices upwards.
Average prices at Park Place Residences at Paya Lebar Quarter, for instance, now stand at $2,022 psf, up 12 percent from $1,806 psf during last year’s Phase 1 launch.
Twin Vew at West Coast Vale was launched at $1,399 psf, 19 percent higher than the $1,176 psf launch price of next door’s Parc Riviera in 2016. Meanwhile, Margaret Ville in Queenstown was launched at $1,887 psf, up 16 percent from the launch price of the nearby Queens Peak at $1,632 psf last year.
Buoyed by en bloc sellers in search of replacement homes and the relatively lower prices compared to new launches, the resale market was also very active during the second quarter, said Lim.
In fact, there were 3,879 caveats lodged for resale and subsale transactions from April to 22 June. The figure is already higher than the 3,828 resale transactions in Q2 last year.
Despite this, the government has maintained all the property cooling measures – except for the shorter holding period of three years for the Seller’s Stamp Duty and the strict property financing rules.
Committed to maintaining a sustainable housing market, the government has shown “that it will intervene if necessary to cool the market, and the possibility remains that it may do so in the future; should price increases be excessive and we see the onset of property speculation”.
While uncertainty in the stock market, rising interest rates and the possibility of a trade war between the US and China may slow down the recovery of the property market, Lim still expects to see an overall price increase of 10 to 12 percent this year.
PropertyGuru’s Ng also predicts further rises in property prices in 2018. But he cautioned that there are potential market risks, including rising interest rates and an elevated vacancy rate. “As such, buyers need to be careful not to overstretch their finances,” he said.
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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com