Blame it on higher land and construction costs.
The flash estimate of the URA PPI indicates a 0.7% increase in prices in Q4 2017. According to ERA Realty Network, this is the second consecutive quarter of increase in the URA PPI, following Q3 2017’s 0.7% increase.
All in all, private property prices in 2017 have increased by 1%; this is a clear turnaround from 2017’s 3.1% price decline.
Furthermore, all segments of the market experienced positive price changes in Q4 2017.
ERA further said, "Prices of landed properties increased by 0.6%, whilst prices of non-landed properties in the CCR increased by 1.6%. Prices of non-landed properties in the RCR increased by 0.2%, whilst prices of non-landed properties in the OCR increased by 0.6%. For the whole of 2017, prices in the CCR, RCR and OCR went up by 0.8%, 16% and 1.2% respectively."
These are very positive numbers we are seeing, indicating that a market recovery is well on track.
Whilst it was very much still a buyers’ market at the beginning of last year, the tide has turned; as sellers try to leverage on the upside potential in property prices over the near term.
Quite a few sellers have withdrawn their properties from the market, either in hopes of selling en-bloc, or at a higher price later.
Here's more from ERA Realty Network:
However, except for the shorter holding period of 3 years for Seller’s Stamp Duty (SSD) liability; all of the other property cooling measures as well as the strict property financing rules remain unchanged. Therefore, the price increase we are seeing now is expected to be gradual in order to be sustainable. We are not in a season of runaway price increases. Buyers remain price sensitive and selective. And, as they are not short of choices, sellers who overprice their properties are likely to drive these buyers to other sellers who are more realistic.
Going forward, we do not expect any of the cooling measures to be removed or tweaked, as prices are already increasing with these measures still in place.
On the positive side, we are expecting prices to further increase in 2018 on solid fundamentals; rather than exuberant demand or speculation.
Positive economic news, such as higher than expected GDP growth, will continue to boost buying sentiment.
The displaced en-bloc home owners will also be looking to replenish their homes.
In addition, new launches in 2018 are expected to be launched at slightly higher prices due to higher land and construction costs.
All these factors may collectively push prices moderately up by 1% – 2% in 2018.
Do you know more about this story? Contact us anonymously through this link.