Singapore Q2 private home prices up 3.2% on 6% jump in city-fringe condos

by Albert02

Singapore Q2 private home prices up 3.2% on 6% jump in city-fringe condos: URA

Singapore Q2 private home prices up 3.2% on 6% jump in city-fringe condos. The official overall private home price index is expected to remain positive for the rest of the year, after rising 3.2 percent quarter on quarter in Q2 thanks to two successful city-fringe property launches at record prices.

The suburbs, where a slew of new launches, including AMO Residence, Seneca Residence, Lentor Modern, and The Arden, are expected to drive further price increases in Q3. “The system is experiencing inflation as a result of rising construction costs and land prices,” said Alan Cheong, executive director of Savills Singapore. “There is a trend towards more optimistic pricing of new launches and higher asking prices in the resale market due to the undersupply caused by the low inventory of unsold units,” said JLL senior director of research and consultancy Ong Teck Hui.

The number of unfinished, unsold private housing units has decreased to 14,087 units as of end-Q1 2022, which is less than half of the recent high of 36,839 units as of end-Q1 2019. However, with the rapid rise in interest rates expected to make buyers more cautious, the momentum of the second-quarter price increase may not be sustainable, according to Ong. Cheong of Savills agreed, adding that “rising mortgage rates will pour cold water on sentiment, even among buyers who do not face affordability issues.”

CBRE’s head of research for South-east Asia, Tricia Song, noted that macroeconomic uncertainty may also deter prospective home buyers. The second-quarter flash estimate for the Urban Redevelopment Authority’s (URA) overall price index for private homes, released on Friday (Jul 1), is up 3.9 percent from the previous quarter. This comes on the heels of a 10.6 percent increase for the entire year in 2021. “Private home prices have risen 18.6 percent since bottoming out in the first quarter of 2020, at the start of Covid,” Song noted. Property consultants predict that the URA index will rise between 5% and 10% this year.

The 3.2 percent qoq increase in the URA’s overall index in Q2 came as no surprise to most of them, following a muted 0.7 percent increase in the previous quarter amid a pullback in activity following the December cooling measures, which also resulted in a lack of new launches. “The higher price increase in Q2 was largely due to strong sales at Piccadilly Grand near Farrer Park MRT station and [email protected] in Mountbatten.” “Both were launched at record prices for 99-year leasehold properties in their respective markets,” said Cheong of Savills.

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