JLL's perspective: Flash estimates of 4th quarter 2017 Private Residential Property Index

Singapore, 2 January 2018 – The private residential property price index rose 0.7% in 4Q17, similar to the increase in the previous quarter. This shows that prices are recovering at a moderate pace so far and not sharply, which could also be indicative of the price momentum going forward. In both the third and fourth quarters of 2017, the indices for all sub-markets were in positive territory, reflective of a broad based recovery. These trends confirm that price recovery in the private residential market is likely to be on a firm footing.

Among the different market segments, the index for non-landed homes in Core Central Region (CCR) registered the strongest increase of 1.6% in 4Q17 while Rest of Central Region (RCR) and Outside Central Region (OCR) had gentler increases of 0.2% and 0.6% in their indices respectively. Compared to its earlier peak in 2008, CCR prices in 4Q17 are lower by 2.5% while RCR and OCR prices are higher by 5.4% and 34% respectively. Viewed from this perspectiveIn view of this, CCR properties appear under-priced and relatively good value to some investors. However due to the ABSD, investments in the prime districts remain selective.

Since prices recovered in mid-2017, the landed market rose the most with a 1.8% rise in its index, after falling 16% from 3Q13 to 2Q17, the largest decline among all market segments. As landed prices have fallen to attractive levels, demand for landed homes has picked up significantly. Transactions rose 63% in 2017 over the previous year, based on caveats lodged to-date. By comparison, transactions in the non-landed segment rose 43% for the same period.

Table 1: Change in Private Residential Price Indices
	3Q2017	4Q2017
All Residential	0.7%	0.7%
Non Landed	0.6%	0.7%
Core Central Region	0.1%	1.6%
Rest of Central Region	0.5%	0.2%
Outside Central Region	0.8%	0.6%
Landed Residential Properties	1.2%	0.6%
Source: URA, JLL

The HDB resale price index eased -0.2% in 4Q17, bringing the full year decline to -1.5%. As new BTO supply continues to be significant, they provide a cheaper housing alternative to the more expensive resale flats especially for first-timers. As moderate demand for resale flats is likely to prevail, HDB resale prices are expected to remain soft.