But gentle decline of 1.1% points to some resilience: Analysts
Prices of private homes slipped for a second straight quarter as the full brunt of a two-month-long circuit breaker was felt by the market.
The Urban Redevelopment Authority (URA) price index for private homes declined 1.1 per cent in the second quarter, according to flash estimates out yesterday.
This was the biggest quarterly decline since the third quarter of 2016, when prices fell 1.5 per cent.
The second-quarter decline followed a 1 per cent dip in the first three months of the year, marking the first quarterly decline in a year, a trend not helped by show galleries being suspended until June 18.
Landed homes led the drop in the second quarter, with prices down 2.7 per cent quarter on quarter, while the non-landed segment fell 0.6 per cent.
Analysts noted that the gentle decline in the second-quarter price index amid the shutdown points to a fairly resilient market.
But private home prices could drop around 5 per cent this year, in line with the expected contraction in Singapore’s economy.
This could be the first year of decline since 2016, when values sank 3.1 per cent, noted Ms Tricia Song, head of research for Singapore, Colliers International. But prices are not likely to fall as much as the 25 per cent plunge recorded in the 12 months to June 30, 2009, amid the global financial crisis, she added.
She said price increases in the past few years have been more sustainable and the Government has reacted quickly with fiscal stimulus and support during the outbreak.
The 0.6 per cent fall in non-landed property prices in the second quarter was due to various discounts offered in the light of economic uncertainty amid the outbreak, analysts said.
URA said non-landed home prices in the core central region slipped 0.1 per cent in the second quarter compared with a 2.2 per cent drop in the previous quarter.
This could be due to discounts given at certain completed projects: 38 Jervois recorded 13 caveats in the second quarter at a median price of $2,058 per sq ft compared with one unit sold at $2,492 psf in the same quarter last year.
In the city fringe or rest of the central region, prices shed 1.9 per cent after dropping 0.5 per cent in the earlier quarter.
Prices in the suburbs or the outside central region were unchanged, against a drop of 0.4 per cent in the first quarter of this year.
Analysts attributed the price resilience in this area to relative affordability and a lack of new supply. Popular projects such as Treasure At Tampines, Parc Clematis and The Florence Residences continued to attract buyers.
New non-landed home sales in the outside central region fell 17 per cent in the second quarter compared with a drop of 67 per cent in the core central region and a 31 per cent fall in the rest of the central region, JLL Singapore’s senior director for research and consultancy Ong Teck Hui said.
URA flash data also showed that prices of landed homes fell 2.7 per cent in the second quarter of this year, after slipping 0.9 per cent in the first.
“Transaction volumes of landed properties plunged 58 per cent in the second quarter, more than the 49 per cent drop for non-landed homes, Mr Ong said.
But there are signs of green shoots in new non-landed home sales.
Caveats as of yesterday show developers sold 618 private homes (excluding executive condominium units) last month, up 34 per cent from 461 in May, and more than double the 264 units in April, Ms Song noted.
Resale transactions, on the other hand, were flat month on month at 180 units last month.
A slew of new projects expected to launch this month may lead to price competition among developers, Mr Desmond Sim, CBRE head of research, South-east Asia, said.
“While we might see a short-term resurgence in new sales volume, current economic conditions will continue to weigh on buyers’ purchases. Larger units with higher quantum of above $2 million are likely to take the brunt,” he added.
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