With a large supply of new homes potentially flooding the market soon, analysts are concerned that private home prices will be suppressed.
Revised price outlook of 0% to 3% for the rest of 2019
Last quarter, private home prices fell 0.7%, slightly further than the 0.6% predicted by the Urban Redevelopment Authority (URA) and from the 0.1% price decline in Q4 of last year.
Fluctuations in recent months could be due to the market trying to stabilise itself after last July’s new round of property cooling measures.
Last quarter, about 80% units were launched. Out of the 2,989 unfinished private homes launched in Q1, 1,657 were sold.
Non-landed private property prices had risen 0.5% in the previous quarter but fell 1.1% in the first quarter. Landed home prices however continued to climb with a 1.1% rise, following a 2% rise the previous quarter.
For the rest of 2019, some analysts are expecting the growth of property prices to fluctuate between negative 0.5% to 0.5%. Others are predicting a negative 2% to 1% growth rate, with the property price index likely to remain level for the rest of the year.
The estimated 53,284 uncompleted residential units expected to hit the market may take 5 years or more to clear.
See more: New launches push private home sales up
Suburban homes and high-end luxury apartments least affected
The high land prices developers paid for replenishing their land banks over the past couple of years could mean they are likely to stick to their guns in terms of selling prices. Resale home sellers may also be keeping to their asking prices.
Buyers and investors, on the other hand, may be tempted by the various offerings in the market and adopt a wait-and-see approach.
Private homes along the new Cross Island MRT line or close to the upcoming MRT stations will continue to appeal to buyers. Suburban homes could also benefit from demand from upgrading HDB owners as many flats will soon reach the end of the minimum occupation period (MOP).
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