1Q19 – Higher price decline, led by prime segment

Based on flash estimates, the URA’s overall private residential property price index fell -0.6% in 1Q19, a faster pace following the -0.1% slide in 4Q18, which marked the beginning of the downward trend in prices after the last round of cooling measures in July 2018.

In the non-landed private homes segment, the Core Central Region (CCR) led the price fall by a hefty decline of -2.9%, which is the biggest quarterly drop since 2Q09. A mild softening of -0.2% was recorded for prices in Rest of Central Region (RCR) while those in Outside Central Region (OCR) remained flat.

The landed home segment posted an increase of 1.1%, reversing the trend in 4Q18 when landed prices dropped -2.0%.

The changes in the price indices for the different market segments between 4Q18 and 1Q19 are tabulated below:

Source: URA Realis/JLL Research

Mr Ong Teck Hui, Senior Director of Research & Consultancy at JLL, commented:

“The faster price decline in 1Q19 shows that the private residential market is continuing to soften due to the effects of cooling measures imposed in July 2018. Based on caveats registered to-date in URA Realis, there are 3,215 transactions of private homes in 1Q19, a sharp 40% y-o-y drop from the 5,328 recorded in 1Q18. Buyers have become more cautious and selective and not in a hurry to purchase, as prices are easing and the significant supply in the sales pipeline would be offering more options to consider.

Tougher conditions in CCR

In 1Q19, we saw the launch of four prime residential projects in CCR – Fourth Avenue Residences, RV Altitude, Fyve Derbyshire and Boulevard 88. It is estimated that more than 300 private homes were launched in 1Q19 in CCR, significantly higher than the 182 launched in 4Q18. Unsold units from projects launched in 2018 have also increased the cumulative unsold stock, exacerbating the supply and demand imbalance in the CCR primary market. The secondary market in CCR also softened in 1Q19 as reflected by a -3.8% decline in median prices of non-landed homes in this segment during the quarter.

Compared to the other sub-markets, CCR has been most affected by the increase in ABSD rates which impacts investors and foreigners more severely. According to URA Realis data as at 4Q18, CCR’s proportion of the total unsold completed and uncompleted private homes is 22.5%, while units sold in CCR in 2018 is only 5.9% of the take-up for the year, reflecting the significant mismatch between supply and demand in this sub-market.

More resilience in OCR and RCR

The flat price trend for non-landed homes in OCR and the mild decrease in RCR in 1Q19, reflects more stable conditions in these sub-markets which are supported by more buyers for owner occupation and more affordable pricing. During the quarter, mass market suburban projects continue to draw buyers as seen in developments such as Affinity at Serangoon, Riverfront Residences, Treasure at Tampines and Parc Botannia where median prices ranged from $1,311 psf to $1,498 psf, which are within the comfort-zone of upgraders and those looking for a more affordable home.”

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