You are here
Private home prices down 0.7% in Q1 2019; rents reverse with 1% rise: URA
SINGAPORE'S private residential price index declined 0.7 per cent in the first quarter this year, led mostly by the high end segment.
This is the second consecutive quarterly decline according to Urban Redevelopment Authority (URA) statistics on Friday after the fourth quarter's 0.1 per cent decerease.
In the first quarter of this year, non-landed home prices fell 1.1 per cent, compared with the 0.5 per cent increase in the previous quarter.
The price declines came as cooling measures continued to take effect on the market.
Christine Li, head of research for Singapore and South East Asia, said: "The introduction of higher ABSD rates has led to buyers becoming more sensitive to price and quantums as buyers, particularly upgraders, have to fork out a higher cash amount upfront. Demand remains healthy, but buyers are trying to dispose their first property before they commit to buying a second property to avoid paying the ABSD."
Giving a breakdown by location, URA said prices of Core Central Region (CCR) non-landed properties decreased by 3.0 per cent, compared with the 1.0 per cent decline in Q4. Meanwhile, prices of non-landed properties in Rest of Central Region (RCR) slipped 0.7 per cent, compared with the 1.8 per cent increase in the previous quarter. Prices for such properties in Outside Central Region (OCR) inched up by 0.2 per cent, compared with Q4's 0.7 per cent increase.
CCR prices registered the sharpest quarterly price decline for the segment since the 5.2 per cent fall in Q2 2009, in the wake of the Global Financial Crisis, Colliers' head of research for Singapore Tricia Song said.
She added that this could be because developers might be seeking to clear inventory in their completed projects, resulting in a decline in median projects. These include Lloyd Sixtyfive, New Futura and TwentyOne Angullia Park.
Landed home prices rose 1.1 per cent in the quarter, after declining 2.0 per cent in the previous quarter.
The Q1 fall was a notch higher than the 0.6 per cent decrease in URA's flash estimate released earlier this month.
PropNex estimates the overal property price index to hover between -2 per cent and 1 per cent for the rest of the year. CBRE says prices could range from falling -3 per cent this year to 0 per cent.
As for private home rents, they rose 1.0 per cent in the first quarter, after falling 1.0 per cent in Q4.
Ms Li of Cushman & Wakefield said this could be attributed to low completion volumes until 2021.
For landed properties, they edged up 0.2 per cent in the quarter, compared with the 2.1 per cent decrease in the previous quarter. Rents of non-landed properties increased by 1.1 per cent, compared with the 0.8 per cent decrease in the previous quarter.
The vacancy rate of completed private residential units, excluding executive condominiums (ECs), dipped to 6.3 per cent as at end-March 2019, from 6.4 per cent in the previous quarter. ECs are a public-private housing hybrid.
In Q1, developers launched 2,989 uncompleted private residential units compared with 1,657 units in the previous quarter. No ECs were launched in the quarter.
They sold 1,838 private residential units (excluding ECs) in the first quarter, compared with the 1,836 units sold in the previous quarter. Developers sold 10 EC units from previous launches over the period.
As at the end of the first quarter, there was a total supply of 53,284 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, compared with 51,498 units in Q4. Of this, 36,839 units remained unsold as at end-March, up from 34,824 units at end-2018.
Eugene Lim, key executive officer of ERA Realty, said that although there may be concerns over pipeline supply, "Developers have five years to sell these units; so this translates into a much more palatable 10,657 units a year for the supply to be fully absorbed. Hence, this supply pipeline may not have a significant downward impact on prices in the short term."
But CBRE's head of research for Singapore and Southeast Asia Desmond Sim said: "With a five-year average demand of between 8,000 and 8,500 units, and in view of the current weaker sentiments, this supply might take more than five years to clear."
There is also a pipeline supply of 3,519 EC units with planning approvals. Of this, 1,871 remain unsold. This means that in total, including ECs, there were 56,803 units in the pipeline with planning approvals. Of this, 38,710 remained unsold, up from 35,649 units in the previous quarter.
In addition, there is also a potential supply of 5,200 units (including ECs) from Government Land Sales (GLS) sites and awarded en-bloc sale sites that have yet to be granted planning approval.