New private home prices see sharper-than-expected jump of 3.3%, fuelling speculation of more cooling measures

SINGAPORE – Private home prices notched a sharper-than-expected jump of 3.3 per cent in the first quarter – surpassing the flash estimate of 2.9 per cent – as buyers snapped up units from new launches amid signs of an economic recovery, low interest rates and vaccine optimism.

This is the fourth consecutive price increase and the steepest quarterly increase since the second quarter of 2018, when private residential prices rose by 3.4 per cent before property curbs hit in July that year.

Data released on Friday morning (April 23) by the Urban Redevelopment Authority (URA) showed that for the first quarter of this year, the price rise was 3.3 per cent, well over its flash estimate of 2.9 per cent and higher than the 2.1 per cent growth in the fourth quarter of last year.

Analysts have flagged the likelihood of more cooling measures being introduced if price growth continues at this pace and exceeds the Government’s gross domestic product growth forecast of 4 per cent to 6 per cent. They noted that the launch of more projects at higher per sq ft pricing could continue to push the price index higher.

Meanwhile, sales of new units by developers jumped 34 per cent in the first quarter to 3,493 units, excluding executive condominiums (ECs), from the 2,603 units in the fourth quarter.

Resale volumes jumped to 4,519 units in the first quarter, compared with 4,249 units sold in the fourth quarter.

Foreign buyers seem to be coming back to the property market in Singapore, with those from China the top buyers, said Ms Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics.

In the last quarter, 281 non-landed homes (excluding ECs) were bought by foreigners, up from 199 units transacted in the fourth quarter. This is also the highest volume inked since the fourth quarter of 2019 when 284 units were sold.

The number of non-landed homes bought by permanent residents has also increased 28.2 per cent quarter on quarter, from 872 units in the fourth quarter to 1,118 units in the first quarter.

The proportion of purchases by Singaporeans fell to 79.3 per cent from 81.9 per cent over the same period, Ms Sun noted.

Mainland Chinese (non-PRs and PRs) purchased 339 non-landed homes in the first quarter, followed by buyers from Malaysia (198 units) and India (170 units).

More Americans are also buying private homes here and they have replaced Indonesians as the fourth-largest group of foreign buyers, Ms Sun said.

Last quarter, Americans bought 58 non-landed homes, more than the 45 units in the fourth quarter of 2020 and the 40 units in the first quarter of 2020. There were also more Taiwanese and South Korean buyers, she added.

In terms of property type, prices of landed properties jumped 6.7 per cent in the first quarter, outpacing a 2.5 per cent increase for non-landed condominiums and apartments.

This compared with a 1.6 per cent drop in land home prices in the fourth quarter of last year, and a 3 per cent increase in non-landed home prices.

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The URA said prices of non-landed properties in the prime or core central region (CCR) grew just 0.5 per cent in the first quarter, compared with a 3.2 per cent rise in the fourth quarter.

But prices of non-landed properties in the city fringe or the rest of central region (RCR) jumped 6.1 per cent, compared with a 4.4 per cent rise in the previous quarter.

Prices in the suburbs or outside central region (OCR) rose 1.1 per cent, compared with a 1.8 per cent gain in the previous quarter.

As for the rental market, overall private home rents rose 2.2 per cent in the first quarter, compared with a 0.1 per cent increase in the fourth quarter. Rents of non-landed properties jumped 2.4 per cent in the first quarter, compared with a 0.1 per cent drop in the previous quarter.

Rents of non-landed properties in the CCR and RCR rose 2.9 per cent and 2 per cent respectively, while rents of non-landed properties in the OCR rose 2.1 per cent.

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Developers launched 3,716 uncompleted private residential units (excluding ECs) for sale in the first quarter, compared with 3,147 units in the previous quarter.

They launched 700 EC units for sale in the first quarter, and sold 647 EC units. In the fourth quarter, they did not launch any EC units for sale, and sold 133 EC units.

As at the end of the first quarter, there was a total supply of 48,139 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, compared with 49,307 units in the previous quarter.

Of this number, 21,602 units remained unsold as at the end of the first quarter, compared with the 24,296 units in the previous quarter.

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