Private home prices up 3.4% in Q2

Home sellers raise their prices as buyers rush to get homes before they turn costlier.

Singapore private home prices jumped 3.4% as the private residential property index climbed 4.9 points from 144.1 points in Q1 to 149 points in Q2, the Urban Redevelopment Authority (URA) revealed. Growth softened from Q1 (3.9%).

According to an announcement, prices of private condos jumped by 1.4% in Core Central Region (CCR), compared to the 5.5% increase last quarter.

Prices in the Rest of Central Region (RCR) grew 5.7%, after registering an increase of 1.2% in the previous quarter. Prices in Outside Central Region (OCR) increased by 2.9%, after registering a 5.6% increase last quarter.

Market sentiment is still very positive, said ERA Realty key executive officer Eugene Lim. “We see increasingly more buyers who are buying now for fear of further price increases going forward. Sellers have also taken the opportunity to revise their asking prices upwards.”

Developers have also been pricing their properties higher. Lim noted that Residences At PLQ this year have been at an average of $2,022 psf, 12% higher than the $1,806 psf during the Phase 1 launch last year.

At Twin VEW, it was launched at $1,399 psf. Compared with Parc Riviera which was launched in 2016 at $1,176 psf, this is a price increase of 19%. Margaret Ville was also launched at $1,887 psf, 16% higher than the $1,632 psf launch price at Queens Peak in 2016.

“These could have contributed to the higher price increases in the RCR and OCR,” Lim said.

The resale market was buoyed by en bloc sellers looking for replacement homes and relatively lower prices compared to new launches. From April to 22 June 2018, there have been 3,879 caveats lodged for resale and subsale transactions. This is already higher than the 3,828 resale transactions in Q2 2017.

However, except for the shorter holding period of 3 years for the Seller’s Stamp Duty (SSD), all of the other property cooling measures as well as the strict property financing rules remain unchanged, Lim observed.

“The government is committed to maintaining a sustainable housing market. It 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,” he added.