URA releases estimates for Private residential property index growth

URA flash estimates that were released on July 1 , for The second quarter in 2022 show that private residential property index recorded an overall gain in the second quarter of 2022, which was 3.2% q-o-q, up from 0.7% q-o-q growth in the first quarter. Despite the cooling measures that were enacted in December of last year, the total private residential property index grew to 3.9% in the first second quarter of this year. As per Catherine He, the head of research at Colliers the increase is due to the success of launches that were sold at higher benchmarked rates.

Copen Grand Tengah Garden Walk floor plan will house around 620 residential units ranging from 1 to 5 bedrooms across its 12 blocks, rising up to 14 floors high, each with generous landscaping.

The number of homes sold (excluding executive condominiums, also known as ECs) have increased in 27.1% q-o-q in the second quarter, which was 2,258 units, according to OrangeTee & Tie senior vice-president of research and analytics Christine Sun.

The new homes that comprise the largest portion of sales during the second quarter are generally sold at higher costs as opposed to resales. The amount of transactions that exceed $2 million increased increasing from 35.3% of total transactions during the first quarter to 38.3% in the second quarter, which increased costs, Sun adds.

“The massive demand is simply exceeding the supply backlog as Singapore is able to recover from its pandemic years,” notes Leonard Tay the head of research at Knight Frank.

Prices of private residential properties that are not landed in the central middle region (CCR) rose to 1.6% q-o-q in the second quarter, an increase from 0.1% q-o-q decrease in the first quarter, as a result of URA caveats filed. Most commonly, the CCR is characterized by luxury houses, the rise in costs coincides with the decreasing of air travel beginning in April, according to Tay.

“High-Net-Worth-Individuals in Asia are looking towards Singapore for private home investment opportunities, including luxury properties in prime areas despite the increased ABSD levied for foreigners,” he continues.

This includes 20 units that were purchased in the amount of $85m at CanningHill Piers by the Chinese national as well as an Indonesian family that is seeking to purchase the 22 unit at Draycott Eight.

Residential prices for private homes that are not landed across the the central region (RCR) have recorded the most rise, growing by 6% over the course of the second quarter. This was up from the 2.7% q-o-q decline last quarter.

“The introduction of Piccadilly Grand and LIV@MB in May re-energized the market and attracted the attention of home buyers,” observes Tay.

In contrast, the increase in private residential property prices slowed down in the outlying central area (OCR) and only increased to 1.7% q-o-q in the second quarter, compared the previous 2.2% q-o-q previously. This is a segment that represents mass market suburban properties, and is driven by HDB upgraders and families that are starting.

Tay further states: “We are seeing those profiting from the sale of the HDB units at a high price in the resale marketplace to fund their transition to the residential market in private homes.”
The pace of growth in property market has slowed. Landed property prices has decreased to an 2.9% q-o-q increase in the second quarter of the year, down from the 4.2% q-o-q growth last quarter. Sales are declining from Good Class Bungalows (GCBs) due to the limited supply was a contributing factor, he says.

Private property prices are expected to slow through the remainder of the year as homeowners may be discouraged due to higher interest rates and lower the eligibility for mortgages. Tay anticipates that upcoming launches on the mass market like Sceneca Residences, Lentor Modern and AMO homes to be a good match with improvements to homes and help sustain price increases, despite rising cost of borrowing. The OrangeTee & Tie’s Sun believes that demand for housing will be resilient and forecasts the overall property prices to increase by six% or 8%. But, Tay estimates a 5% to 7% rise this year.