3Q18 - Price increase moderates to lowest level since recovery in 3Q17

Mr Ong Teck Hui, National Director, Research & Consultancy 王德辉, 研究与咨询部董事(新加坡)

October 01, 2018

Based on flash estimates, the URA’s private residential property price index rose 0.5% in 3Q18, a significant moderation from the 3.4% rise in the previous quarter. This shows that the cooling measures that took effect from 6 July are having an effect on slowing price growth in the private home market. The changes in the price indices for the different market segments between 2Q and 3Q18 are tabulated below:

  2Q18 3Q18 (Flash estimates)
Overall 3.4% 0.5%
Non-landed 3.2% 0.2%
Core Central Region (CCR) 0.9% 1.2%
Rest of Central Region (RCR) 5.6% -0.8%
Outside Central Region (OCR) 3.0%> 0.1%
Landed 4.1% 1.7%

Source: URA Realis/JLL Research

The landed segment was more resilient in 3Q18, with the index rising 1.7%. Landed property prices corrected the most between 3Q13 and 2Q17, which has drawn buyers to this market segment. In spite of having risen in the past year, prices of landed homes are still seen as relatively attractive by many buyers which has led to transactions at firm prices.

Among the non-landed segment, the index for CCR registered the highest increase of 1.2%. Compared to RCR and OCR, CCR had the least new launches in 3Q18, i.e. 8 St. Thomas which has a high median price of $3,226 psf. Consequently most prime district buyers had to explore opportunities in the secondary market, which accounted for 76% of CCR transactions in 3Q18 (based on caveats in URA Realis to-date), driving up secondary market median price from $1,838 psf in 2Q18 to $1,919 psf in the third quarter. 

The index for non-landed homes in OCR inched up a marginal 0.1%, indicative of prices remaining flat in the third quarter. New launches in 3Q18 at affordable moderate pricing contributed to the price stability. Riverfront Residences, which had a median price of $1,309 psf, and accounted for about 72% of new sale transactions in OCR, had a significant impact on OCR prices in 3Q18.

Prices for non-landed homes in RCR retreated in 3Q18 as shown by the -0.8% decrease in the index. Pricing was driven mainly by the primary market which accounted for about 74% of transactions in RCR. The third quarter saw launches at lower prices and more new sale projects recording sales at lower prices. In 2Q18, three projects ie The Verandah Residences, Margaret Ville and Amber 45, were launched at median prices above $1,800 psf while launches in 3Q18 were below that price level. Out of 18 new sale projects that had transactions in 2Q18 and 3Q18, 72% of them recorded lower per square foot prices. Consequently, median prices of new non-landed homes in RCR fell from $1,885 psf in 2Q18 to $1,706 psf in 3Q18.

A trend of price moderation can be seen in 3Q18 due to the effects of the cooling measures that were imposed in early July. The measures have arrested price increases in existing new projects, moderated new launch prices and tempered asking prices in the resale market as well. We can expect this trend to continue with price increases remaining low key or flattening out in the next few quarters.

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