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王德辉, 新加坡董事 (新加坡)
The turnaround in the URA residential property price index in 3Q17 was expected. The consequences of prolonged positive buyer sentiments, a build-up in sales momentum and moderation in price declines would be a price recovery eventually. In the first eight months of 2017, the total volume of private home transactions was around 57% higher than that in the same period last year. The decline in the overall index had been moderating by -0.5% in 4Q16, -0.4% in 1Q17 and -0.1% in 2Q17. As more buyers flocked back to the market anticipating its bottoming, many sellers have stiffened or increased their asking prices. However, the 0.5% increase in the overall index is modest, reflecting realistic upward price adjustments in keeping with the pace in demand recovery. Buyers are still affected by the cooling measures especially foreign and local investors.
Among the different market segments, the landed home market posted the highest index increase of 1% in 3Q17. Landed home prices corrected the most in the last four years, with the landed index dropping 16% between 3Q13 and 2Q17, while that for non-landed eased 10.2% for the same period. There is a strong rebound in demand for landed properties as buyers try to capitalise on attractive prices. The indices for non-landed homes in CCR and OCR rose 0.2% and 0.7% respectively while that for RCR remained flat in 3Q17. They reflect a gradual price recovery in these sub-markets.
We expect the overall index to continue rising in 4Q17, and for the whole of 2017 it is likely to increase 0.5% to 1%, with the increases in the second half of the year positively offsetting the declines in the first half. For 2018, we forecast an increase of 3% to 5% in the overall index, assuming that the cooling measures remain in place and barring unforeseen adverse external events derailing recovery.
Mr Ong Teck Hui
+65 6494 3727 / +65 9842 1155