SINGAPORE - Singapore's private home prices rose at a faster rate in the third quarter despite retightened Covid-19 restrictions, driven by the surge in landed property sales and prices, and the knock-on effects of the red-hot Housing Board resale market.
Private property values climbed 1.1 per cent from the previous quarter, according to data from the Urban Redevelopment Authority (URA) on Friday (Oct 22). This was up from a 0.8 per cent rise in the second quarter, and came after a 3.3 per cent gain in the first quarter.
The increase was also slightly above the flash estimate of a 0.9 per cent rise. Year on year, prices rose 7.5 per cent and were up 5.3 per cent to date this year.
Prices of landed properties bounced up 2.6 per cent in the third quarter, compared with a 0.3 per cent contraction in the second quarter, buoyed by robust sales of good class bungalows (GCBs) and demand for landed property.
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 increase in the previous quarter.
This was due to slower price growth in the prime or core central region, and also in the suburbs or outside central region.
In the prime district, prices fell 0.5 per cent, compared with a 1.1 per cent gain in the previous quarter. In the suburbs, prices dipped 0.1 per cent, compared with a 1.9 per cent jump in the previous quarter.
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 volumes, 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.
More than 710 new ECs were transacted in the third quarter, up nearly 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 other existing projects, Ms Tricia Song, head of research for South-east Asia at CBRE said.
Apart from Normanton Park, suburban projects made up nine of the top ten best-selling condos for the quarter, she noted.
Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said the launch of quarantine-free travel lanes with a few countries under the expanded Vaccinated Travel Lane scheme could further boost demand.
Mr Wong Xian Yang, Singapore head of research at Cushman & Wakefield, said new launch prices are expected to head north amid rising construction costs and land costs as well as diminishing unsold inventories.
The total number of unsold completed and uncompleted units fell nearly 12 per cent quarter on quarter to 17,165 - marking a new low since the second quarter of 2017 when total unsold units stood at 16,929, he added.
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 units in the previous quarter. The last time resale volumes exceeded 5,000 units was in the second quarter of 2010 when more than 5,200 units 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.
As for 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 properties rose 1.4 per cent, compared with a 3.1 per cent increase in the previous quarter. Rents in the prime area 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 lease terms in view of the ongoing 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. In addition, ultra-high-net-worth families are willing to pay top rental premiums for GCBs," he added.