Prices of new private homes hit historical high in 2018
It was reported that the private residential property segment in Singapore has remained buoyant in the third quarter of 2018 in spite of the new property cooling measures implemented since July.
During the quarter, a couple of new launch projects have continued to see active buying interest after the property curbs were imposed as primary home sales surged by 27% quarter-on-quarter (3,012 units were transacted within the quarter alone).
The number comprises of units being sold in a couple of new launch projects in the city fringe region, on top of the 1,000 plus units sold on the eve of the day which the new curbs took effect. Projects such as Stirling Residences, Riverfront Residences, JadeScape and Park Colonial have made up a huge bulk of the total number of units being sold.
Looking at only the Rest of Central Region (RCR) or city fringe, the total number of new private homes sold rose to 1,765 – up by a whopping 91% quarter-on-quarter and 106% year-on-year within 3Q 2018. It was also noted that more projects were being launch in quarter, supplying a total of 2,338 new private homes (187% more than the previous quarter).
The secondary or resale market has taken the biggest hit from the property curbs in 3Q 2018 as the total number of transactions dipped by 43% quarter-on-quarter to 2,672 residential units. The number was more significant for private homes in the Outside Central Region (OCR) or suburbs as resale home transactions fell by 45% to only 1,051 units being sold.
The pool of buyers for properties in suburbs has mainly been HDB upgraders. Thus, the decline in resale private home transactions in this region is likely due to the subdued HDB resale market with sellers’ sales proceeds being affects and also the lower Loan-To-Value ratio (part of the new property cooling measures introduced in July) – meaning prospects will need to fork out more cash for their private home purchases.
Despite the fact that the number of units sold in the prime districts or Core Central Region (CCR) has dipped by 41% quarter-on-quarter, the demand for luxury homes (priced above $3 million) has remained lively with 187 units being sold – higher than the 5-year average of 173 homes sold.
Prices of private homes have continued to rise, at a slower pace of 0.5% in the 3rd quarter. Just within the first 3 quarters of 2018, the overall price of residential properties have risen by 7.9%.
In fact, prices of private homes across various segments in the property market all attained new heights within the first 3 quarters, since 1995. Based on URA Realis data released on 14 November 2018, the average price of non-landed residential properties in the CCR was $2,133 psf; RCR was $1,592 psf and $1,189 psf for those in the OCR.