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Q3 private home prices rise 0.7%; beats flash estimate, confirms first gain in 4 years

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The rise in the index for Q3 2017 comes after 15 consecutive quarterly declines since the peak in Q3 2013.

THE BENCHMARK private residential property price index rose 0.7 per cent in the third quarter of 2017 over the second quarter, slightly faster than the 0.5 per cent increase shown in flash estimates, according to data released by Singapore's Urban Redevelopment Authority (URA) on Friday.

In Q2 this year, the index dipped 0.1 per cent quarter on quarter.

The rise in the index for Q3 2017 comes after 15 consecutive quarterly declines since the peak in Q3 2013.

URA said that prices of landed properties rose 1.2 per cent in Q3 2017 after dipping 0.3 per cent in Q2 2017.

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Prices of non-landed properties increased 0.6 per cent after dipping 0.1 per cent.

Prices of non-landed properties in the prime areas or Core Central Region (CCR) rose 0.1 per cent compared with the 0.5 per cent drop in the previous quarter. Prices of non-landed properties in the city fringe or Rest of Central Region (RCR) climbed 0.5 per cent, following a 0.6 per cent increase in the previous quarter. Prices of non-landed properties in the suburbs or Outside Central Region (OCR) expanded 0.8 per cent, contrasting with a 0.3 per cent fall in the previous quarter.

Developers launched 1,183 uncompleted private residential units (excluding executive condos or ECs) for sale in Q3 2017, down from 2,011 units in the previous quarter. They sold 2,663 private homes (excluding ECs) in Q3 2017 - lower than the 3,077 units sold in the previous quarter.

Developers launched 531 EC units for sale in Q3 2017 and sold 1,539 EC units over the same period - compared with no EC unit launched and 954 units sold in the previous quarter, URA said.

URA also provided secondary market sales figures for private homes, excluding ECs. It said 3,949 units were sold through the resale market in Q3 2017, up from the 3,698 units in the previous quarter. There were 81 units sold in the subsale market in Q3 2017, lower than the 130 units transacted in the previous quarter.

URA's rental index for private homes remained unchanged, compared with a 0.2 per cent decline in the previous quarter.

Rentals of non-landed private homes in CCR retreated 0.8 per cent, contrasting with the increase of 0.1 per cent in the previous quarter. In the city-fringe or RCR, rents climbed 0.9 per cent, contrasting with the drop of 0.4 per cent in the previous quarter. Rentals in the suburbs contracted 0.3 per cent after sliding 0.6 per cent in the previous quarter.

The vacancy rate of completed private homes (excluding ECs) rose to 8.4 per cent as at end-Q3 2017 from 8.1 per cent as at end-Q2 2017. Giving a breakdown by regions, URA said that the vacancy rates of completed private homes as at end-Q3 2017 in CCR, RCR and OCR were 10.9 per cent, 8.3 per cent and 7.3 per cent respectively - up from the 10.3 per cent, 8.1 per cent and 7.1 per cent in the previous quarter.

As at end-Q3 2017, there was a total supply of 35,022 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, lower than the 35,423 units at end-Q2 2017. (Out of these figures, 16,031 units remained unsold as at end-Q3 2017, an increase from the 15,085 units at end-Q2 2017.)

After adding the supply of 7,254 EC units in the pipeline, there were 42,276 units in the pipeline with planning approvals. Of the EC units in the pipeline, 1,147 units remained unsold. In total, 17,178 units with planning approvals (including ECs) remained unsold.

Based on the expected completion dates reported by developers, 6,006 units (including ECs) will be completed in the fourth quarter of 2017. Another 11,519 units (including ECs) are slated for completion in 2018.

Savills Singapore research head Alan Cheong noted that sentiments on the ground have already been firming up for a few quarters. He expects URA's private home price index to post quarter-on-quarter increases for the next four quarters "within the 0.5 per cent to less than one per cent range, driven both by improving sentiments on the buy side and production cost-push pressures on the supply side".

ERA Realty Network key executive officer Eugene Lim, too, said: " Home buyers need not be overly worried that prices will see a robust spike, as the market recovery is expected to be gradual."

Although Singapore's economy is expected to grow by almost 3 per cent this year, "developers and sellers would also have to be mindful that buyers' purchasing power remains tied to their income, due to the Total Debt Servicing Ratio (TDSR) as well as the lower loan quantum that can be granted by the banks for second and subsequent property purchases".

"The ABSD (additional buyer's stamp duty) and SSD (seller's stamp duty) regime remain in place," he added.

He expects URA's price index to move sideways, possibly between zero per cent to one per cent increase for the whole 2017, much less than the 3.1 per cent decline in 2016.