Private residential property prices up 2.2% in 2020
Prices are expected to pick up in 2021 amidst booming buyer sentiment.
The private residential property market prices rose by 2.2% for the whole of 2020, decelerating only slightly from the 2.7% growth recorded in 2019, data from the Urban Redevelopment Authority (URA) has shown.
For the fourth quarter, the private residential property index rose by 3.2 points to 157 points, a 2.1% increase from the 153.8 points in Q3 previously. This was the steepest quarterly increase since Q2, 2018, when prices jumped 3.4% QoQ.
All regions recorded increases in Q4 compared to the previous quarter, possibly driven by a plethora of new launches, noted Christine Sun, head of research and consultancy, OrangeTee & Tie. The property agency has found that residential property prices in the Rest of Central Region (RCR) and the Core Central Region (CCR) climbed 4.8% and 3.3% QoQ, respectively, whilst property prices located Outside of Central Region (OCR) increased by 1.7% QoQ.
For the whole of 2020, property prices in RCR and OCR rose by 5.1% and 3.1% respectively. Notably, The Landmark ($2,137 psf) and The Linq@Beauty World ($2,171 psf) projects were transacted above the $1,813 per square foot (psf) median price for all new non-landed homes in the RCR in 2020, said Sun.
The same trend was seen in the OCR, where the median price of new projects such as at the Clavon ($1,637 psf), Ki Residences at Brookvale ($1,766 psf), and Midwood ($1,624 psf) were transacted above the $1,547 psf median price for all new non-landed homes in the OCR in 2020.
In the CCR, the median price of Fourth Avenue Residences rose from $2,258 psf in Q3 2020 to $2,296 psf in Q4 2020. Prices at Kopar at Newton have also increased from S$2,384 psf (47 units) to S$2,433 psf (6 units) over the same period.
Similar price increases were observed at other launched projects like The M, The Avenir, Leedon Green, Royalgreen, Treasure at Tampines, The Garden Residences, Jadescape, Forett at Bukit Timah, Stirling Residences, The Florence Residences, The Woodleigh Residences, and Avenue South Residence from Q3 to Q4 2020, according to Sun.
Activity is expected to pick up in 2021, with buyer sentiment improving thanks to news of vaccines and with Singapore’s economy expected to rebound in 2021.
OrangeTee&Tie forecasts that the overall private home prices may rise by 1% to 4% whilst prices of new homes may grow at a faster pace of between 2% and 5% in 2021.
“Investors around the world are gearing up for a steadier recovery in 2021. The speedy development and expected efficacies of the vaccines could be a game-changer that may bring the pandemic under control this year,” said Sun.
Amongst factors that may push prices up include improving buyer sentiment, which may pick up further on the growing vaccine optimism and Phase 3 reopening. The overall price index also stands to gain from a possible number of blockbuster launches in the luxury and city fringe areas.
Furthermore, the local housing market will reportedly continue to receive a boost by the ample liquidity still circulating in the financial system.
Meanwhile, there has been a renewed interest in resale properties over the past few months, noted Sun.
“Luxury homes and big resale units have been in demand, whilst attractively priced private resale homes in the mass market and city fringe areas have been snapped up. We anticipate demand for resale homes to pick up further this year whilst resale prices may increase around 1% to 4% for the full year,” she concluded.