Singapore private home prices weaken further with 1.1% drop in Q2: URA flash data

In the city fringe or rest of central region, prices shed 1.9 per cent. PHOTO: ST FILE

SINGAPORE - Prices of private homes slipped for a second straight quarter as demand was suppressed during the nearly two month-long circuit breaker period.

Flash estimates from the Urban Redevelopment Authority (URA) on Wednesday morning (July 1) showed its overall price index for private residential properties declined 1.1 per cent in the second quarter from the previous three months.

This comes after private home prices dropped 1 per cent in the first quarter of 2020, their first quarterly decline in a year.

"Last quarter, show flats were closed while house viewings were barred during the circuit breaker period. As a result, buyer demand was suppressed which will have a negative impact on home prices," said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.

"However, it is too early to conclude that this is the beginning of a sustained period of price declines. We should be cautious in interpreting price dips in a volatile market, particularly when sales volume is low," she said.

Prices of non-landed properties shed 0.6 per cent quarter on quarter in Q2 2020 after dipping 1 per cent in the previous quarter.

Giving a breakdown by region, the URA said that prices of non-landed homes in the prime areas or core central region slipped 0.1 per cent in Q2 2020, a smaller rate of decline compared with the drop of 2.2 per cent in the previous quarter.

In the city fringe or rest of central region, prices shed 1.9 per cent after dropping 0.5 per cent in the previous quarter.

In the suburbs or outside central region, prices were unchanged, against the drop of 0.4 per cent in the earlier quarter.

URA's flash data also showed that prices of landed properties fell 2.7 per cent in the second quarter of this year, after slipping 0.9 per cent in the first quarter.

Based on URA caveat data, the number of resale transactions inked in Q2 2020 is about a quarter of what has been sold in Q2 2019. Similarly, the number of new home sales transacted last quarter is about half of what was sold in Q2 2019, OrangeTee & Tie said.

Ms Sun, however, noted: "There is sporadic evidence of 'green shoots' in certain market segments and some buyers were snapping up relatively good bargains in the market over the past few weeks. Therefore, the price trends could be distorted by some of these properties or special-priced units."

"We should observe the property market for a few more quarters to ascertain if prices have bottomed. That said, prices of homes may remain soft in the coming months given the macroeconomic uncertainties," she added.

Ms Sun said she expects private home prices to weaken by 3 to 5 per cent for the whole of this year.

URA's flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up till mid-June.

The statistics will be updated on July 24, 2020, when the URA releases its full set of real estate statistics for Q2 2020.

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