Private home price growth slows to 1.3% in Q3: URA

Condo prices in the Core Central Region (CCR) inched up 2%.

Price growth of private homes moderated 1.3% QoQ in Q3 from the 1.5% QoQ increase in Q2, according to the Urban Redevelopment Authority (URA). Prices of landed homes also inched up 1% QoQ over the same period after declining 0.1% in Q2; whilst condo prices slowed to 1.3% QoQ from 2% QoQ in Q2.

Also read: Private home prices rose 1.5% in Q2: URA

Price growth of private homes has also slowed down in the last quarter and for the whole year. The cumulative price growth for the first three quarters of this year is 2.1%, which is much slower than the 7.9% increase recorded over the same period in 2018.

New home sales volumes have jumped 39.6% QoQ to 3,281 units in Q3 from 2,350 units in the previous quarter, the highest number of units sold in a single quarter since Q2 2013.

Condo prices in the Core Central Region (CCR) inched up 2% QoQ in Q3, slightly slower than the 2.3% QoQ increase in the previous quarter. Condo price growth also moderated at 1.3% in the Rest of Central Region (RCR) compared to 3.5% QoQ in Q2. In contrast, condo prices in Outside Central Region (OCR) grew at a faster rate at 0.8% QoQ in Q3 from only a 0.4% increase in Q2.

“New sales in RCR increased 32.7% from 1,162 units in Q2 2019 to 1,542 units in Q3 2019 whilst the number of new sales in OCR rose 53.5% from 1,018 units to 1,563 units over the same period,” said Christine Sun, head of research and consultancy, OrangeTee &Tie.

Sun also stated that it is unlikely that the government will implement cooling measures in the near term. “The risk of a housing bubble forming is rather remote as this is usually caused a significant run-up in home prices caused by high speculative demand, runaway land prices, and excessive buying that is fuelled by exuberant spending,” Sun continued.

“Safeguards like the TDSR (Total Debt Servicing Ratio) that are put in place to prevent excessive borrowing has kept many homes buyers from overstretching their finances. The overheated collective sales market has cooled down substantially and recent land bids are currently more measured,” she added.

Also read: Singapore housing market 'remarkably stable': UBS

Additionally, developers launched for sale more private residential units for sale in Q3 at 3,628 compared with 2,502 units in the previous quarter, said URA.

Vacancy rates of completed private residential properties as at the end of Q3 in CCR, RCR and OCR were 8.2%, 6.0% and 5.3% respectively, compared with the 7.8%, 6.4% and 5.7% in the previous quarter

In the leasing market, the rental prices of private residential properties inched up 0.1% QoQ in Q3 compared with a 1.3% QoQ rise in Q2. Rentals of landed properties contracted 2.3% QoQ in the third quarter from the 0.3% QoQ increase in the previous quarter. Further, rentals of non-landed properties slowed to a 0.4% QoQ rise over the same period from a 1.4% increase in the previous quarter.

By constituent area, condo rentals in the RCR and OCR increased by 1.6% QoQ and 0.8% QoQ, respectively, after recording increases of 1.4% QoQ and 1.2% QoQ in Q2, respectively. On the other hand condo rents in the CCR fell by 0.7% QoQ from a 1.5% increase in the previous quarter.

The improving leasing market may be attributed to more expats being redeployed to Singapore, said OrangeTee & Tie. “Thousands of multinational companies have set up regional offices in the Asia Pacific, and Singapore may now be taking the lead as a key Business Hub in Asia in view of the rising tensions in Hong Kong,” said Sun.

Sun adds that the easing market may continue to strengthen in the coming months as more expat professionals may continue to be redeployed here.

On the resale side, the number of deals remained almost the same at 2,378 deals in Q3 from 2,371 deals in Q2. The proportion of resale transactions to overall sales volumes decreased to 41.3% during the quarter from 49.7% in Q2. Sub-sale transactions also rose to 104 units from 45 units previously, making up for 1.8% of all deals.

It is projected that 3,235 units will be completed in Q4, and another 5,750 units will be done next year. The potential supply of 4,900 units from Government Land Sales (GLS) sites and awarded en-bloc sale sites that have not been granted planning approval yet. These comprise of about 4,400 units from awarded GLS sites and Confirmed List sites that have not been awarded yet, and about 500 units from transacted en-bloc sale sites.