Private home prices continue to grow, and that growth is increasing. Residential property price increases began soon after the Circuit Breaker and has been increasing for the first three months of 2021. The URA(Urban Redevelopment Authority) estimates that private property index increased 2.9% quarter on quarter faster than the 2.1% quarter on quarter increase during fourth quarter 2020.
This increase was due to prices of private residential properties on the city fringe areas otherwise known as Rest of Central Region (RCR).
The reason non-landed property prices rose in 1Q 2021 was due to 6.1% quarter on quarter growth in non-landed property prices in the RCR. Two large condominiums, Normanton Park and The Reef at King’s Dock with 1862 and 429 units each.
The Reef at King’s Dock is situated at the premium waterfront Keppel Bay area. Close by are the HarbourFront MRT Station and Vivocity mall. Because of this, The Reef was able to command relatively high prices and resulted in the increase in RCR non-landed price index.
In 1Q 2021, new homes for The Reef at King’s Dock sold at median prices of $2,257 PSF, compared to the median transacted price of $1,821 PSF for non-landed homes in the RCR. The Reef was also one of the best-selling projects for Q1 2021.
Three other best-selling residential developments that commanded above average $2000PSF median transacted prices Q1 2021 and also led to increase in RCR prices index were Amber Park, Avenue South Residence & One Pearl Bank.
After increasing 1.8% for the 4th quarter of 2020, prices of non-landed homes in Outside Central Region grew by a relatively moderate 0.9% in 1Q 2021. Core Central Region non-landed private housing price index contracted 0.3% first quarter of this year after increasing 3.2% preceding quarter.
Landed Housing Prices
During the past three years, the prices of landed residential properties have been volatile. Periods of price growth is followed by periods of periods where prices have declined. In 1Q 2021, price index for landed housing rose 5.6% after dropping 1.6% preceding quarter. The price growth of landed housing contributed by improvement in market confidence and healthy buying demand when landed property supplies are still limited.
HDB Resale Prices
HDB resale prices have been increasing for 21 months. It increased by 2.8% of the first quarter 2021 and annual growth rate was 8% year – on – year.
The pandemic contributed to an increase in resale prices of HDB flats. Since construction of new flats was delayed, some buyers chose to get resale flats rather than wait for their Build-to-order flats.
Too early for more cooling measures
At the moment, additional market intervention via government is too early.
The last market intervention was July 2018 when the private residential property price index was 3.4% quarter on quarter and 9.1% year on year. The index is not growing at that pace currently.
The government also studies other indicators. Property transaction volume, household debt, size of loans granted by banks in Singapore related to real estate loans. The transaction numbers of new plus resale private homes these past year is stable and there have been no sharp increases.
The Singapore economy is also still in recession. In particular, the construction industry has been adversely hit by the Covid-19 outbreak. Output dropped by 35.9% last year. If the government were to start any cooling measures again, the property market will be affected, and the construction industry will be in turn affected as well. Overall, this will slow economic recovery.