Private home prices drop 0.7% in Q1 for second straight quarterly decline

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. PHOTO: ST FILE

SINGAPORE - Private home prices eased again for the second straight quarter, slipping by 0.7 per cent for the first quarter of 2019 from the previous three-month period, according to the Urban Redevelopment Authority's (URA) final figures released on Friday (April 26).

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 2018, recording the first impact of the latest round of property cooling measures.

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.

Giving a breakdown by location for non-landed properties, prices fell 3.0 per cent in the prime areas or core central region (CCR), versus a 1.0 per cent drop in the previous quarter. Prices in the city fringe or rest of the central region (RCR) declined by 0.7 per cent after rising 1.8 per cent in the previous quarter. Prices in the suburbs or outside the central region (OCR) edged up 0.2 per cent, compared with the 0.7 per cent increase in the previous 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, and the total number of transactions (both new and resale) to come in at 19,000-21,000 for the whole year, slightly less than last year's 21,804.

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."

She expects overall prices to remain flat or rise marginally this year if the global economy does not deteriorate and the job market remains healthy.

Developers launched 2,989 uncompleted private residential units (excluding ECs) 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.

There was a total supply of 53,284 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals at the end of the first quarter of this year. This is more than the 51,498 units in the previous quarter.

Of this pipeline supply, the number of unsold units stands at 36,839 at end-March, up from the 34,824 units at end-2018.

In total, 38,710 units with planning approvals (including ECs) remain unsold at the end of the first quarter, up from 35,649 in the previous quarter.

In addition to these units, there is a potential supply of 5,200 units (including ECs) from Government Land Sales (about 4,700 units) and awarded en-bloc sale sites (about 500 units) that have not been granted planning approval yet.

Mr Desmond Sim, head of research for South-east Asia, CBRE, sounded a more cautious note, with a revised price outlook of between 0 per cent and -3 per cent.

He noted the strong take-up of 1,838 new units for the first quarter that matched the previous quarter's figure of 1,836, but added a caveat. "This was on the back of almost 80 per cent more units launched this quarter," he said.

Mr Sim 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.

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