Private home prices drop 0.7% in Q1

The drop in private home prices in the first quarter was due to a 1.1 per cent fall in the prices of condominiums and private apartments, which had edged up 0.5 per cent in the previous quarter. Prices of landed homes, in contrast, rose 1.1 per cent
The drop in private home prices in the first quarter was due to a 1.1 per cent fall in the prices of condominiums and private apartments, which had edged up 0.5 per cent in the previous quarter. Prices of landed homes, in contrast, rose 1.1 per cent over the previous quarter, following a 2 per cent fall in the fourth quarter.ST PHOTO: LIM YAOHUI

Fall greater than URA estimates and steeper than 0.1% dip in fourth quarter of last year

Private home prices eased again for the second straight quarter, slipping by 0.7 per cent for the first quarter of this year from the previous three-month period, according to final figures released by the Urban Redevelopment Authority (URA) yesterday.

The decline was a notch bigger than the 0.6 per cent drop earlier estimated by URA and steeper than the 0.1 per cent price dip in the fourth quarter of last year.

The drop in the first quarter was due to a 1.1 per cent fall in the prices of non-landed condominiums and private apartments, which had edged up 0.5 per cent in the previous quarter.

Prices of landed homes, in contrast, rose 1.1 per cent over the previous quarter, following a 2 per cent fall in the fourth quarter.

ERA key executive officer Eugene Lim said: "The decrease in prices was largely expected, as the impact of the July 2018 cooling measures work their way through the market."

However, he noted that property prices outside the central region are less affected due to upgrading demand from Housing Board flat owners. Prices at the very top end of the market are also holding, he added, pointing to the more than 150 transactions above $4 million in the first quarter.

Mr Lim forecasts private home prices to move in the -0.5 per cent to +0.5 per cent range this year.

PropNex Realty chief executive officer Ismail Gafoor said: "With resale owners holding on to their prices and developers having previously committed to high land bid prices, we can expect the private property price index to continue to hold for the remaining quarters of the year," he said, adding that it will likely hover between -2 per cent and +1 per cent for the rest of the year.

Ms Christine Sun, head of research and consultancy for OrangeTee & Tie, said: "Residential projects within the vicinity of upcoming MRT stations along the Cross Island Line and areas marked for further development under the Draft Masterplan 2019 may see an increase in buyer interest and possibly an uplift of prices in the future."

 

Developers launched 2,989 uncompleted private residential units (excluding executive condos) for sale in the first quarter of this year, compared with 1,657 units in the previous quarter, the URA data showed.

The take-up rate for these new units remained roughly the same over the two periods, with developers selling 1,838 units in the first quarter of this year compared with 1,836 in the previous quarter.

Mr Desmond Sim, head of research for South-east Asia, CBRE, noted this strong take-up of new units for the first quarter that matched the previous quarter's figure, but added a caveat.

"This was on the back of almost 80 per cent more units launched this quarter," he said.

He also pointed to a "formidable pipeline" of 53,284 uncompleted residential units with planning approvals. "In view of the current weaker sentiments, this supply might take more than five years to clear," he said.

He therefore sounded a more cautious note, with a revised price outlook of between 0 per cent and -3 per cent for the rest of the year.

A version of this article appeared in the print edition of The Straits Times on April 27, 2019, with the headline 'Private home prices drop 0.7% in Q1'. Print Edition | Subscribe