Home sale prices rise for the fifth straight quarter

Private residential property prices rose by 0.9% in the second quarter of 2021.

Home sale prices rose for the fifth straight quarter, by 0.9%, in the second quarter of 2021, according to the latest estimates from the Urban Redevelopment Authority (URA).

This is the slowest pace prices have increased in the last three quarters, following the 3.3% increase recorded in the first quarter.

Compared to the same quarter last year, prices rose by 7.3%, the steepest quarterly price increment since the second quarter of 2018.

Prices rose in both non-landed and landed segments, which grew by 0.9% and 0.8%, quarter on quarter respectively.

Within the non-landed home segment, prices in the Outside Central Region rose the steepest, growing by 1.8%, followed by the Core Central Region and the Rest of Central Region, rising by 0.6% and 0.3% respectively.

OrangeTee Senior Vice President of Research & Analytics Christine Sun, said prices rose at a slower pace due to several drastic changes in the market.

“There is enormous demand for completed homes in the suburban regions as the supply of new mass-market homes has been anemic. Fewer new homes were completed as a result of the construction delays and labour crunch,” Sun said. She added that the heightened alert period last quarter has also led to lower launches.

Dr. Tan Tee Khoon, country manager for PropertyGuru Singapore, said there is still a strong demand of entry-level condos in the market, fueled by HBD upgraders whose flats fulfilled their minimum occupation period in 2020 and 2021.

He added that talks of cooling measures still loom, but it might not be as necessary as previously thought.

"If prices only inch up a little, less than 5% for instance, or hold resilient, additional property curbs may not be necessary," Tan said. "Additionally, given the current COVID-19 situation, the Government’s priority seems to increase the vaccination rate in our population rather than to deal a cocktail of property curbs to shake the residential market."

Cushman & Wakefield Singapore Head of Research Wong Xian Yang said home prices could increase up to 7% in 2021, as prices are already up by 4.3% in the first half.

"Amidst ample liquidity in the region, recovering global economy and strong underlying demand for private homes, private residential prices could increase by up to 7% in 2021. In H1 2021, private residential prices are already up by 4.3%," Wong said.

On the other hand, Propnex forecasts an overall private home sale increase of 6 to 7% for the full year of 2021.