Private home prices fall by 0.1% in Q2, signalling imminent market recovery

High-rise condominium buildings in the Singapore city centre.
High-rise condominium buildings in the Singapore city centre. PHOTO: ST FILE

SINGAPORE - Private home prices may have reached their trough, as overall prices fell by 0.1 per cent for the second quarter.

In a more certain sign of the property market's recovery, this was a much slower decline compared with the 0.4 per cent dip in the previous quarter, according to data from the Urban Redevelopment Authority on Friday (July 28).

Mr Desmond Sim, head of CBRE Research for Singapore and Southeast Asia, said that the property market was on the cusp of recovery.

"The market has achieved another data point of a minute price correction, which further reinforces the point that the trough of the market is here."

While the dip marked the 15th consecutive quarter of decline, prices of non-landed properties declined by 0.1 per cent, a contrast from a flat first quarter.

In the non-landed segment, city fringe property registered a price increase of 0.6 per cent, following a 0.3 per cent increase in the previous quarter.

Mr Sim noted that this was likely due to the new launches, such as popular projects such as Commonwealth Towers in Queenstown, as well as Artra and Principal Garden in Redhill.

However, condos in the core central region, including areas such as Tanglin and Orchard, saw a fall in prices by 0.5 per cent, slightly steeper than the 0.4 per cent decline last quarter.

Values also decreased in suburban areas by 0.3 per cent - a contrast from an increase of 0.1 per cent in the previous quarter.

Landed property prices fell by 0.3 per cent, compared with the 1.8 per cent dip in the first quarter.

The rental market remained soft, as rentals of private residential properties slipped 0.2 per cent.

However, this was a much slower decline compared with the first quarter, which slipped 0.9 per cent.

The vacancy rate of completed private homes, excluding executive condos (ECs), was 8.1 per cent at the end of June, unchanged from 8.1 per cent in the previous quarter.

Developers sold 3,077 private homes, not counting ECs, in the second quarter - higher than the 2,962 shifted last quarter.

In the public housing market, there was a surge in transactions and easing declines in prices.

HDB resale prices dipped 0.1 per cent for the second quarter, an improvement from a 0.5 per cent in the previous quarter.

There were 6,001 resale transactions in the second quarter, an increase of 32.5 per cent from 4,530 transactions in the first quarter.

Mr Ismail Gafoor, chief executive of PropNex, said that the current prices are "enticing" for buyers to enter the market, especially for young buyers and upgraders.

"The real estate market is currently abuzz with activities as we feel positive sentiment all-round."

He said that this was demonstrated by "keen interest displayed by consumers at the recent launches of Martin Modern, Hundred Palms Residences EC and Le Quest, bullish bidding of land sites by developers and an increasing number of successful collective deals recently".