Singapore Q2 private home prices up 3.2% on 6% jump in city-fringe condos

by Albert02

Singapore Q2 private home prices up 3.2% on 6% jump in city-fringe condos

Singapore Q2 private home prices up 3.2% on 6% jump in city-fringe condos. The official overall private home price index is expected to remain in positive territory for the rest of the year, after rising 3.2% quarter on quarter in Q2 thanks to two successful property launches in the city-fringe at record prices.

The suburbs, where a slew of launches, including AMO Residence, Seneca Residence, Lentor Modern, and The Arden, are expected to provide impetus for further price gains in Q3. “There is inflation in the system due to rising construction costs and land prices,” said Alan Cheong, executive director of Savills Singapore. “There is a trend towards more optimistic pricing of new launches and higher asking prices in the resale market due to undersupply caused by low inventory of unsold units,” said Ong Teck Hui, JLL senior director of research and consultancy.

The number of unfinished, unsold private housing units has fallen to 14,087 units as of end-Q1 2022, less than half of the previous high of 36,839 units as of end-Q1 2019. However, with the rapid rise in interest rates expected to make buyers more cautious, Ong believes that the momentum of the second-quarter price increase may not be sustainable. Savills’ Cheong agreed, adding that “rising mortgage rates will pour cold water on sentiment, even for the category of buyers who do not face affordability issues.”

Tricia Song, CBRE’s head of research for South-east Asia, noted that macroeconomic uncertainty may also deter potential home buyers. The Urban Redevelopment Authority’s (URA) second-quarter flash estimate for its overall price index for private homes, released on Friday (Jul 1), is up 3.9% from the previous quarter. This follows a 10.6 percent increase for the entire year in 2021. “Private home prices have risen 18.6 percent since bottoming out in Q1 2020, at the start of Covid,” Song noted. Property consultants anticipate that the URA’s index will rise between 5% and 10% this year.

The 3.2 percent year on year increase in the URA’s overall index in Q2 came as no surprise to most, following a muted 0.7 percent increase in the previous quarter amid a pullback in activity following the December cooling measures, which also resulted in a lack of new launches. “The higher price increase in Q2 was largely due to strong sales at Piccadilly Grand near Farrer Park MRT station and [email protected] in Mountbatten,” says the company. “Both were launched at record prices in their respective markets for 99-year leasehold properties,” said Cheong of Savills.

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Source: https://www.businesstimes.com.sg/real-estate/singapore-q2-private-home-prices-up-32-on-6-jump-in-city-fringe-condos-ura

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