Private home prices beat flash estimates to rise 3.3% in Q1, boosted by landed properties

SINGAPORE: Personal residence costs in Singapore rose 3.3 per cent within the first quarter of the yr, topping flash estimates launched earlier within the month, on the again of robust demand and costlier transactions, analysts mentioned.

The personal residential property value index elevated to 162.2 factors within the first quarter of 2021, up from 157 factors within the final quarter of 2020, in accordance with actual property statistics launched by the City Redevelopment Authority (URA) on Friday (Apr 23).

The determine marks the fourth straight quarter of value will increase, and extends the two.1 per cent rise within the quarter earlier than.

It's also the sharpest quarterly enhance for the reason that second quarter of 2018, when costs rose by 3.4 per cent, triggering a spherical of cooling measures after.

READ: Personal residence costs rise 2.2% final yr regardless of COVID-19 pandemic

The general enhance could be attributed to robust native demand for personal homeownership and the resurgence of overseas funding, mentioned Ms Christine Solar, Senior Vice-President of Analysis & Analytics at OrangeTee & Tie.

Mr Lee Sze Teck, who heads analysis at Huttons Asia, added that robust demand was evidenced by the full variety of transactions, which stood at 8,100 - the best for the reason that fourth quarter of 2012.

LANDED PROPERTY BOOST

Specifically, the upper residence costs have been boosted by the landed property section - costs for such houses rose 6.7 per cent within the first quarter, reversing a 1.6 per cent decline within the earlier quarter.

This rise may very well be resulting from a rising demand for bigger residence areas amid the pandemic, mentioned Mr Nicholas Mak, Head of Analysis & Consultancy at ERA Realty.

The "rising prices of condominiums had also made landed housing appear to be value for money", resulting in larger demand for the latter, he added.

Within the non-landed property section, costs rose 2.5 per cent, down barely from a 3 per cent rise within the quarter earlier than, mentioned URA.

Particularly, within the Core Central Area, costs rose 0.5 per cent, slowing from a 3.2 per cent enhance within the quarter earlier than.

Within the Remainder of Central Area, costs rose 6.1 per cent, extending the earlier quarter's enhance of 4.4 per cent.

Costs within the Outdoors Central Area rose by 1.1 per cent, slowing from a 1.8 per cent enhance the earlier quarter.

Ms Solar famous that overseas consumers have returned to the market in each landed and non-landed segments.

In comparison with the earlier quarters, the variety of houses purchased by overseas consumers has elevated by about 28 per cent and 41 per cent respectively, she mentioned.

RENTALS

Rental noticed stronger progress within the first quarter of the yr, rising by 2.2 per cent, beating the earlier quarter’s enhance of 0.1 per cent.

It marks a stronger turnaround following decreases seen within the second and third quarters of final yr.

Ms Solar famous this was as a result of fewer houses have been out there for lease in latest months, with extra Singaporeans returning to the nation and overseas tenants staying put amid journey restrictions.

This diminished inventory has propped up rents, she mentioned.

LAUNCHES AND TAKE-UP 

Builders launched 3,716 personal houses (excluding govt condominiums) on the market within the first quarter, in contrast with 3,147 models within the earlier quarter.

They bought 3,493 such models within the interval, up 34.2 per cent from the two,603 models bought within the final quarter of 2020.

As well as, they launched 700 govt condominium models, and bought 647 such models. This can be a spike from the 133 models bought within the earlier quarter, the place no EC models have been launched.

READ: Singapore's new personal residence gross sales double in March amid demand for luxurious properties

RESALE MARKET

Within the resale market, 4,519 models modified fingers within the first three months of the yr, in contrast with 4,249 models within the previous quarter.

Such transactions accounted for 55.8 per cent of all gross sales within the first quarter, down from a 61.3 per cent share within the earlier quarter.

SUPPLY IN THE PIPELINE

As of the tip of the primary quarter, there have been 21,602 unsold and uncompleted personal residential houses within the pipeline – in contrast with 24,296 models within the quarter earlier than.

Together with govt condominiums, the quantity goes as much as 23,735 models, decrease than the 26,426 within the earlier quarter.

Analysts had earlier flagged that the dwindling provide of models may very well be pushing up costs.

READ: Analysts count on personal residence costs to rise additional on tight provide and powerful demand

Primarily based on the anticipated completion dates reported by builders, 4,942 models (together with govt condominiums) are slated to be accomplished within the remaining three quarters of the yr.

URA added that there's additionally a possible provide of round 3,840 models (together with govt condominiums) from Authorities Land Gross sales (GLS) websites that haven't obtained planning approval but.

“The supply of private housing in the pipeline, including from GLS sites, will sufficiently cater to the housing needs of the population when completed over the next few years," URA said.

But Huttons’ Mr Lee expressed doubts over the sufficiency of current supply.

“Assuming all the en bloc sites and sites on the Confirmed and Reserve List of the first half of the 2021 GLS programme are sold, this will probably add up to around 7,000 units.

"It will not be enough to meet the average annual demand of 9,400 units in the last five years,” he mentioned.

URA added that the Authorities will proceed to watch financial and property market circumstances intently and alter the availability of future GLS Programmes if wanted, to make sure it stays sufficient in assembly demand.

OUTLOOK

Analysts count on personal residence costs to rise additional, with low mortgage charges and a recovering economic system.

As well as, extra luxurious and city-fringe tasks are set to be launched within the coming months, whereas mass-market tasks stay restricted, Ms Solar mentioned.

“The increased sales of such homes with higher price tags may uplift the overall residential price index in the next few quarters,” she defined.

Mr Lee added that future value progress could come from value pressures within the development business, which is having a tough time bringing in employees due to the pandemic.

With recent border restrictions for travellers from India, Mr Lee mentioned labour prices may go up even additional in 2021 and 2023.