Singapore Q2 Private Home Price Surprise with 0.3% Uptick

Private home prices in Singapore edged up 0.3 per cent in a surprising turnaround from an initial flash estimate in early July which had the private residential property index declining by 1.1 per cent.

However, this may be a one-off as most analysts expect economic headwinds and weaker employment prospects to put downward pressure on prices and volumes this year.

The 0.3 per cent figure - which follows a 1 per cent decrease in Q1 - could be due to pent-up demand in the second half of June when Singapore moved into phase two of reopening, some analysts highlighted. Prior to that, developers had to shutter their showflats from April 7, while physical viewing of properties was disallowed.

Transaction volumes also took a tumble during the second quarter, slumping nearly 38 per cent quarter-on-quarter to 2,664 units due to the circuit breaker and slower economy.

According to the latest report from the Urban Redevelopment Authority, prices of landed properties remained unchanged in Q2, versus a 0.9 per cent decrease in Q1, while prices of non-landed properties edged up 0.4 per cent, led by the core central region (CCR). In comparison, non-landed properties slid 1 per cent in the previous quarter.

By location, prices of non-landed properties in the CCR rose 2.7 per cent in Q2, reversing from a 2.2 per cent decrease in the previous quarter. Meanwhile, prices of non-landed properties in the rest of the central region fell by 1.7 per cent, sharper than the 0.5 per cent decrease in the prior quarter. Outside the central region, prices went up marginally by 0.1 per cent, compared with the 0.4 per cent decrease in the previous quarter.

"There were almost no major project launches in Q2, which typically help to boost volume and support prices," said Ismail Gafoor, chief executive of PropNex.

The primary market proved more resilient than the secondary market in Q2, analysts said, with the former accounting for nearly two thirds of all transactions.

For example at Sengkang Grand Residences, 8 units were sold just in the last two weeks. How will developers price upcoming new launches like Irwell Bank Residences at Irwell Bank Road, remains to be seen when new launches ramp up again in the latter half of the year.

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