Despite a fall in resale non-landed residential property prices last month, home prices have rebound 1.5% in the second quarter following a 0.7% fall in Q1.
Q2’s rise in home prices the first since July 2018
The local property market had encountered some bumps in the road after last July, following the authorities’ latest round of property cooling measures.
Last quarter’s 1.5% rise in comparison to the same period in 2018 gave market players some hope for further growth.
Analysts are attributing the higher overall prices last quarter to the higher land costs of the sites on which new projects were being launched.
The collective sale fever from the past few years could translate to the higher launch prices which in turn boosted home prices.
2,502 new private homes were launched by developers in Q2 and 2,350 units were sold. The 93.9% take-up rate is a considerable improvement to the 61.5% take-up rate in Q1.
Highest price increase of 3.5% in the city fringes
The most obvious shifts were in the city fringes or the rest of the central region where home prices rose 3.5% quarter-on-quarter.
These areas are close to the city centre or the central business district (CBD) and have always been popular with expatriates and young professionals as well as investors looking for long-term investments with high potential of short term growth in terms of rental yields.
Home prices in the prime central region also rose, at 2.3%. This is perhaps the largest turnaround as a 3% decline was recorded in the first quarter of the year.
There were a number of luxury properties launched in the first few months of the year, and progressive sales from these earlier launches could have also contributed to the increase in Q2.
In the suburbs and outside central region, the rise in home prices was gentler at 0.4%.
How the market performs in the upcoming months will depend on how buyers and investors react to a possible economic slowdown amidst global uncertainties.