S’pore home prices rise fastest in almost eight years in 1Q18

SINGAPORE (April 3): Price recovery gathers momentum in 1Q18, rising by 3.1% over 4Q2017, according to the Urban Redevelopment Authority (URA) flash estimates. This marked the third straight quarter of price growth since the index bottomed in 2Q2017. It is also the strongest quarterly increase since the 5.2% quarter-on-quarter (q-o-q) increase in 2Q2010, says Tricia Song, Colliers International head of research for Singapore (pictured).

With the latest price increase, the URA private property price index is up 4.6% year-on-year, adds Song. As at end 1Q18, private residential prices are just 7.5% below the peak in 3Q13.

The largest price uptick was seen in the Core Central Region (CCR), which registered a 5% increase, boosted by new launches over the past year, such as Gramercy Park, Martin Modern and New Futura. Prices of Gramercy Park for instance registered a median price of S$3,177 (RM9,383) psf in 1Q2018, up 9.5% compared to the S$2,902 psf in 4Q2017. Martin Modern also saw its prices climb steadily, up 14.8% from S$2.354 psf in 4Q2017 to S$2,703 psf in 1Q2018, says Colliers.

Resale prices in some districts have also risen due to the high land rates implied from the recent collective sales in the Bukit Timah, River Valley and Holland Road neighbourhood. “We think the high-end homes segment has turned a corner - following a price slump since June 2013,” says Song. Her forecast is that prices in the CCR could increase by 10% in 2018.

The URA flash estimates also showed a 3.8% increase in prices in the Outside Central Region (OCR) or suburbs. Demand for OCR homes is attributed to their affordability and is supported by the largest pool of buyers, says Ong Teck Hui, JLL national director for research & consultancy.

According to JLL, OCR transactions accounted for about 50% of total transaction volume in 1q2018, while CCR and Rest of Central Region (RCR) accounted for 18% and 31% respectively. Projects in the OCR that registered price increases include Grandeur Park Residences at Tanah Merah in the east which saw a 7.8% q-o-q increase in average price from S$1,416 psf in 4Q2017 to S$1,526 psf in 1Q2018. Likewise, Symphony Suites in Yishun registered a 3.9% increase in average price from S$1,046 psf in 4Q2017 to S$1,087 psf in 1Q2018. Other projects in the OCR with average prices firming include Kingsford Waterbay (S$1,379 psf) and Parc Botannia (S$1,283 psf).

Developers have also been pricing their properties higher, such as The Tapestry in Tampines that was launched on March 24 at an average of S$1,310 psf. Neighbouring The Alps Residences was previously launched in October 2016 at an average of S$1,089 psf. This a 20% increase in price in less than two years, notes Eugene Lim, ERA Realty’s key executive officer.

“Having witnessed three consecutive quarters of price increased thus far, this is a clear sign of positive sentiments in the residential property market, despite almost all the cooling measures still in place,” says Nicholas Mak, ZACD Group executive director. “This would have a positive impact on property prices, and private residential price index is expected to rise by 8% to as much as 15% in 2018.”