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JLL News Flash | URA Flash Estimate of 1Q17 Private Residential Property Index

Overall non-landed index flat for the first time and OCR non-landed index positive for the first time, after 13 quarters of decline

"The non-landed indices from the 1Q17 URA flash estimate suggest that prices in this market segment could be stabilizing. It is significant that for the first time after 13 quarters of decline, the non-landed index remained flat. It is also the first time that the non-landed index for Outside Central Region (OCR) turned positive with a 0.1% increase after 13 quarters of decline. The non-landed index for Rest of Central Region (RCR) remaining flat in 1Q17 and the mild decline of 0.2% for non-landed homes in Core Central Region (CCR) also contributed to the stability of the overall non-landed index.

The buoyant OCR primary market helped to firm prices in the suburban non-landed market in 1Q17. During the quarter, we saw strong responses to launches such as The Clement Canopy (average $1,342 psf) and Grandeur Park Residences (average $1,394 psf) while projects from previous launches such as Parc Riviera (average $1,258 psf) and The Santorini (average $1,045 psf) also garnered substantial sales. This raised the proportion of primary market sales for non-landed homes in OCR to 74% in 1Q17 from 67% in 4Q16, and also significantly higher than the 2016 average of 59%. 

In 1Q17, primary market sales of non-landed homes in RCR accounted for 66% of total transactions, up from the 55% in 4Q16  and the average of 51% for 2016. Park Place Residences at PLQ (average $1,808 psf) alone accounted for 26% of new home sales during the quarter while good take-up was also seen at Principal Garden (average $1,644 psf), Commonwealth Towers (average $1,672 psf) and Sims Urban Oasis (average $1,374 psf).
The 2.8% decline in the landed index shows that this sub-market is still softening. The high absolute prices of landed homes remains a challenge in the current market which has trended towards an affordability play with smaller size non-landed units in greater demand.

The positive buying sentiments seen in the first quarter is likely to continue with the market remaining upbeat. Healthy sales volume would eventually lead to prices stabilizing especially in the non-landed market although short term fluctuations in the indices may be expected. The recent imposition of Additional Conveyance Duties (ACD) could result in developers offering further discounts to clear unsold stock. It remains uncertain as to how this could protract the turnaround in prices."