The private property market seems to be staying afloat rather well as prices hit a 5-year high at the end of the second quarter.
City centre and city fringe properties sold at higher prices
While the increase came from districts all over the island, the boost came partly from the increase in prices of private homes in the city centre and city fringes.
The price index rose 1.3%, bringing it to its highest point since 2014. While the increase may not seem much, an increase amidst the current global uncertainties and the China-United States trade war is nevertheless a positive step.
In the core central and rest of central regions, prices of non-landed private homes rose 1.5% and 3% respectively. The rise is unexpected as general market sentiments have been dull.
In the previous quarter, prices of private non-landed residential properties in the core central and rest of central region fell 3% and 0.7% respectively. In the suburbs, prices rose 0.5%, a slight lift from the 0.2% increase in Q1.
Another reason for the uptick could be the affirmative sales of new homes. Some benchmark prices were recorded in recent months. In the rest of the central region, for example, 367 new homes were sold at $2,000 psf or more. In the first quarter of the year, only 31 new homes were sold at such prices.
The increase shows investor confidence despite uncertain times
Analysts say that this shows buyers and investor confidence in the long-term prospects of the local private residential market, for which they are willing to overlook the short-term market volatilities. The political and economic stability that Singapore has portrayed has helped sustain sales even in such unpredictable times.
The demand for new luxury homes is on the rise, as well as private homes situated in good locations. New launches in the months ahead could also expect positive responses from buyers should they fulfil the above-mentioned criteria.
Some analysts are expecting a 1% to 3% increase in prices for 2019 while others are expecting sustained price growth with some downward pressure in the mid to long term.