It seems like anti-speculation measures are taking effect in both private and public sectors of the property market. Curiously enough, these two sectors are seeing very different outcomes. Private home prices are growing at a slower rate as home seekers wait out for the authorities to intervene. Meanwhile, things look much brighter in the public sector, as resale flat prices soar with the help strong demand and declining supply.
(The private and public housing sectors are seeing rather different results.)
According to the URA, the private residential property price index gained 1.9% over Q2 to 202.8 points, falling just short of Q1’s 2.2% score. Q2 marks the seventh consecutive time that the private sector has seen a sluggish rate of price growth, to the disappointment of optimistic industry watchers, who feel a cautious market sentiment is to blame. Developers, buyers and investors are all waiting for a clearer direction for policy changes in the aftermath of May’s General Elections, where soaring housing prices was a key issue.
The slowing in price growth was most distinct in suburban districts outside central Singapore. Prices of non-landed private property there went up by 1.6%, slightly more than half of the 3.1% that Q1 saw. Along the city outskirts, prices rose by 1.2% (as compared to 2% for Q1). The core central area of Singapore was the only region where prices jumped past Q1’s record of 1.1%; there, Q2 saw a hike of 1.6%.
Still, private property consultants remain positive that low interest rates and high liquidity will continue to spur buying and price growths for the next two quarters. Yet expectations are lowered, as policy risks and global uncertainties loom ahead and threaten to further moderate prices. Analysts expect the private home front to remain at current levels for Q3, citing how new launches for the second quarter such as Eight Courtyards were averagely priced at $790-1,000 per square ft (psf) – comparable to top projects in Q1 that went for $830-1,000 psf. What this ultimately means to home seekers is that private home prices will stay in a similar range when launched to them in the next six to 12 months.
In the public sector, the resale price index grew by 2.9% to 179.9 points in Q2, beating Q1’s 1.6% growth. Consultants have observed that the decline in resale flat supply is a direct result of the various government-imposed cooling measures – many private home owners are now reluctant to sell off their flats because of a rule introduced last year that says HDB flat buyers have to sell their private property. On the other hand, buyers who have figured out which sector of the market has received the most impact from cooling measures are returning to the resale market in flocks. This simultaneous dip in supply and rise in demand ultimately resulted in a resale sector coming back to life.
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Related Categories: HDB, Private Residential
Tags: anti-speculation measures, cooling measures, Eight Courtyards, private housing in Singapore, property price index, property prices, property trends, public housing in Singapore, URA, urban redevelopment authority
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