Private home prices climb at faster pace in Q3 despite tight curbs

Private home prices rose at a faster rate in the third quarter despite tighter Covid-19 curbs, thanks to the booming landed property sector and flow-on effects of the red-hot Housing Board resale market.

Values climbed 1.1 per cent from the second quarter, according to Urban Redevelopment Authority (URA) data yesterday.

This comes after a 0.8 per cent rise in the second quarter and a 3.3 per cent gain in the first.

Prices rose 7.5 per cent year on year and were up 5.3 per cent to date this year.

Landed home prices shot up 2.6 per cent in the third quarter, compared with a 0.3 per cent drop in the second, buoyed by robust sales of good class bungalows.

Prices rose at a slower pace for condominiums and apartments, up just 0.7 per cent in the third quarter compared with a 1.1 per cent lift in the previous quarter.

Prime district prices fell 0.5 per cent compared with a 1.1 per cent gain in the previous quarter. Suburban prices dipped 0.1 per cent after a 1.9 per cent jump in the second three months of the year.

Prices in the city fringe or the rest of central region saw the strongest growth, gaining 2.6 per cent, compared with a 0.1 per cent rise in the previous quarter.

In terms of transaction volume, sales of new non-landed homes, excluding executive condominiums (ECs), rose 19.7 per cent in the third quarter to 3,550 units, from 2,966 units in the second quarter.

Around 700 new EC units were sold in the third quarter, up 45 per cent from the 495 units sold in the previous quarter, PropNex said.

Fuelled by upgrader demand and an improving economy, take-up rates rose despite an 8.8 per cent drop in new private homes launched in the third quarter - to 2,149 units, from 2,356 units in the previous quarter.

New suburban launches such as Pasir Ris 8 and The Watergardens at Canberra benefited from pent-up upgrader demand and boosted sales at existing projects, said Ms Tricia Song, head of research for South-east Asia at CBRE.

Apart from Normanton Park, suburban projects made up nine of the top 10 best-selling condos for the quarter, she noted.

Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said the launch of quarantine-free travel lanes with a few countries could further boost demand.

Mr Wong Xian Yang, head of research for Singapore at Cushman & Wakefield, said new launch prices are expected to rise amid higher construction and land costs as well as diminishing unsold inventory.

The number of unsold completed and uncompleted units fell nearly 12 per cent quarter on quarter to 17,165 - a new low since the second quarter of 2017 when there were 16,929 unsold units. This is expected to boost bidding activity for the upcoming government land tenders and more collective sale attempts.

Resale transactions also rose to 5,362 units from 5,333 in the previous quarter. The last time resale volumes exceeded 5,000 units was in the second quarter of 2010 when about 5,200 were sold, PropNex said.

Ms Song cited construction delays and a widening price gap between new launches and resale properties as reasons for the surge in resale volumes.

In the rental market, landlords were still able to command higher rents in recent months because of limited available stock and new home construction delays.

But overall, the growth in private home rents slowed slightly to 1.8 per cent in the third quarter, compared with a 2.9 per cent increase in the second quarter.

Rents of non-landed homes rose 1.4 per cent after a 3.1 per cent lift in the previous quarter.

Prime area rents grew 0.7 per cent, while those in the city fringe rose 1.6 per cent. Rents in the suburbs jumped 2.6 per cent.

Tenants are taking on longer leases in view of the pandemic, said Mr Leonard Tay, head of research at Knight Frank Singapore. "Expatriates are contributing to rental demand as companies in the tech sector ramp up activities in Singapore," he added.

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A version of this article appeared in the print edition of The Straits Times on October 23, 2021, with the headline Private home prices climb at faster pace in Q3 despite tight curbs. Subscribe