Compared to a slightly faster growth of 3.9 percent in Q1, Singapore private home prices rose 3.4 percent quarter-on-quarter in Q2 2018, according to more complete data released by the Urban Redevelopment Authority (URA) on Friday (27 July). Desmond Sim, CBRE’s research head for Singapore and Southeast Asia said: “The URA residential price index registered its fourth consecutive quarter of growth. This represents a 9.1 percent increase from the trough in Q2 2017, and a year-to-date recovery of 7.4 percent,”. The annual price growth also exceeds the 5.41 percent year-on-year rise in Q1 2018.
In the Rest of Central Region (RCR), the price increased about 5.6% and the 3.0 percent rise in the Outside Central Region (OCR) as launches saw good demand in both areas. During the period, sales of private homes in the second quarter was healthy with 2,366 units sold, while 2,437 uncompleted private homes were launched for sale.
In five quarters, the number of launches was the highest. Sim noted. “Despite the healthy take-up, demand could not match the supply from new launches, leading to a higher number of unsold units (26,961) in Q2 2018 as compared to 24,193 units last quarter”.
Property developers launched and sold 2,011 units and 3,077 units respectively, with unsold houses numbering 17,827 in all, in Q2 2017.
The figures for the launches and sales exclude executive condominiums (ECs), but the number of unsold units include this and comprise dwellings with planning approval.
The sale number was increased quarterly and this was a big advantage for property developers to invest in their new launch projects. A plenty of new launch projects appear at District 1, District 5, District 10, District 13, District 21, etc. Home-buyers can have more choices to find a place that suit for their needs.
URA said there is a potential supply pipeline of 19,500 units (including ECs) as of 30 June that have not been granted planning approval yet. Until mid-July, around 8,400 units from awarded Government Land Sales (GLS) and confirmed list sites that have not been awarded yet, as well as about 11,100 units from awarded collective sales, including en bloc sites sold .
The government agency revealed that a large part of this upcoming supply of units could enter the market this year or in 2019, with completion targeted by 2021 onwards. However, Sim explained that supply from en bloc sites might vary due to the inherent complexities of the collective sale process as well as pressures from the recent property curbs.
“CBRE expects exuberance in the collective sale market to calm as the measures will have a greater impact on land acquisitions. Developers will have to adjust their pricing expectations, marketing strategies, and timing of their launches. “On the demand side, buyers are expected to be more selective as they recalibrate their budgets and options. However, we expect the price index to continue to display some growth till year end, as some new launch prices are establishing new benchmarks on the back of higher land costs,” he added.
Meanwhile, in Q2, the URA’s rental index rose 1.0 percent quarter-on-quarter, but it is only 0.39 percent higher on an annual basis. The vacancy rate also slid to 7.1 percent from 7.4 percent in the prior quarter and 8.1 percent in Q2 2017.
Adapted from PropertyGuru, July 30, 2018
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