Private home prices rise at slower pace of 0.8% in Q2 amid tighter Covid-19 measures

Private home prices grew at a much slower pace in the second quarter due to a pullback in landed housing and fewer launches amid tighter Covid-19 restrictions.

Prices rose 0.8 per cent quarter on quarter – easing from a rise of 3.3 per cent in the first three months of the year and 2.1 per cent in the fourth quarter of last year.

Urban Redevelopment Authority data yesterday also showed values year on year are up by 7.1 per cent.

Sales of new non-landed homes, excluding executive condominiums (ECs), fell 15 per cent in the second quarter to 2,966 units, from 3,493 in the first.

The tighter restrictions in May and June slowed new launches last month, said Mr Wong Xian Yang, the Singapore head of research at Cushman & Wakefield.

In the second quarter, 2,356 new private homes were launched, 37 per cent less than the 3,716 in the first but still 27 per cent more than a year earlier during the circuit breaker.

New curbs until Aug 18 mean some launches set for this month – such as The Watergardens at Canberra and Parc Greenwich EC – have been deferred, said PropNex chief executive Ismail Gafoor.

Notably, resale transactions were robust in the second quarter, as buyers turned to the sector amid construction delays and held-back new launches. The 5,333 units sold account for 63 per cent of total transactions in the second quarter.

Resales, which jumped 18 per cent from the previous quarter, are at the highest level since the third quarter of 2009, Mr Wong said.

But Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, noted that rising home values have triggered a slight slowdown in some locations: “The pullback in demand was within expectations since the overall price index has increased for five consecutive quarters.”

In terms of property type, prices of landed properties dipped 0.3 per cent in the second quarter, compared with a sharp 6.7 per cent increase in the first quarter.

Prices rose at a slower pace for condos and apartments, rising 1.1 per cent in the second quarter, compared with a 2.5 per cent increase in the previous quarter.

HDB upgraders helped fuel price gains in the suburbs or outside central region (OCR), which rose 1.9 per cent, compared with a 1.1 per cent gain in the previous quarter.

Meanwhile, prices in the prime region grew 1.1 per cent in the second quarter, compared with a 0.5 per cent rise in the first, boosted by high unit prices of new launches.

City fringe prices saw the slowest growth, edging up just 0.1 per cent compared with a 6.1 per cent rise in the previous quarter. This was due to a drop in new sales to 1,123 units in the second quarter, from 1,798 in the previous quarter.

Meanwhile, rents are up thanks to limited available stock and new home construction delays.

Overall, private home rents climbed 2.9 per cent in the second quarter compared with a 2.2 per cent increase in the first quarter.

Rents of non-landed properties rose 3.1 per cent, compared with a 2.4 per cent increase in the previous quarter. The strongest rental growth was in suburban areas, which jumped 3.6 per cent, said Mr Nicholas Mak, head of research and consultancy at ERA Singapore.

“Many buyers of suburban condominiums are HDB upgraders,” he noted. However, with completion of their new homes delayed, they have to rent, he said.

“Source: [Private home prices rise at slower pace of 0.8% in Q2 amid tighter Covid-19 measures] © Singapore Press Holdings Limited. Permission required for reproduction”

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