Prices of private homes in Singapore rose by 3.5 percent in from April through June, compared with the first three months of the year, accelerating from first-quarter growth of 0.7 percent, according to figures released Friday by the Urban Redevelopment Authority.
The price surge was led by the non-landed private home segment, with values up 3.6 percent after falling 0.3 percent in the first quarter. Price growth for landed homes slowed to 2.9 percent in the second quarter from 4.2 percent in the first three months.
Within the non-landed homes segment, prices in the city-fringe Rest of Central Region led the charge with a 6.4 percent second-quarter increase, as new launches Piccadilly Grand near Little India and Liv @ MB in Mountbatten drove up values in the RCR, said local agency PropNex Realty.
“The successful launch of Piccadilly Grand and Liv @ MB helped to rev up the new home sales market in Q2 2022, which was relatively lacklustre in Q1 due to the lack of launches and weaker sentiment right after the introduction of new cooling measures in December 2021,” said PropNex CEO Ismail Gafoor. “The slower price growth in Q1 2022 also proved to be short-lived as a rebound in transactions propped up home values in Q2 2022.”
Projects Propel RCR Sales
During the second quarter, Piccadilly Grand — a joint residential project of City Developments Ltd and Hongkong Land subsidiary MCL Land — sold 324 units at a median price of S$2,175 (now $1,564) per square foot. Bukit Sembawang’s Liv @ MB, meanwhile, shifted 231 units at a median price of $2,408 per square foot.
The two projects boosted RCR new home sales to 1,309 units, up from 856 in the first quarter, as 1,239 resale properties also changed hands in the region.
In the Outside Central Region, non-landed home prices rose by 2.1 percent in the second quarter, slowing slightly from the 2.2 percent growth of the preceding three months. Firm pricing from a lack of unsold stock in the primary market and a pickup in resales helped support price growth in the OCR, PropNex said.
Developers sold 496 new OCR private homes (excluding executive condos) in the second quarter — the lowest quarterly reading of new sales in the region since 2008 — amid limited supply of new units.
The Core Central Region continued to show the softest growth in the second quarter as non-landed private home prices rose 1.9 percent, reversing the 0.1 percent decline of the previous three months. There were 592 new private homes sold in the CCR, up from 361 in the first quarter.
“We expect private home prices to continue to increase gradually for the rest of the year, with upcoming launches stimulating price growth,” Gafoor said. “In addition, the firm land prices, rising construction costs and healthy homebuyer demand will also exert some upward pressure on home values.”
Foreign Demand Rebounds
Local agency Edmund Tie noted a revival in foreign demand in the second quarter after cooling measures led to a “knee-jerk adjustment” in the January-March period. Foreign buyers accounted for 4.9 percent of non-landed home sales, up from 3.1 percent in the first quarter.
Americans took the top spot for foreign demand in all three regions, accounting for 22 percent of transactions by foreigners in the second quarter, while mainland Chinese and Indonesians ranked a distant second and third.
“The primary reason is that buyers from the United States of America are exempted from paying any ABSD on the first residential property purchase in Singapore due to free-trade agreement,” said Lam Chern Woon, head of research and consulting at Edmund Tie, referring to an extra tax imposed on most foreign homebuyers. “If borders continue to open and if China relaxes its zero COVID-19 policy, foreign demand and pricing in the CCR could surprise on the upside.”
Property services firm Colliers expects residential prices to remain resilient in the near term on the back of attractive launches in the OCR, including the Lentor Modern integrated project near Lentor MRT station and Sceneca Residence at Tanah Merah Kechil Link.
“However, the upcoming hikes in borrowing rates may eventually price some buyers out of the market in terms of their mortgage eligibility,” said Catherine He, head of research for Singapore at Colliers. “In addition, the combination of macroeconomic uncertainties, higher cost of living and historical high prices may also deter some prospective buyers.”