Private property prices climb 2.7% in 2019

By Timothy Tay/ EdgeProp Singapore|January 23, 2020 2:23 PM SGT

The URA has released its property market statistics for 4Q2019. It reported that the overall price index of private residential properties increased by 0.5% q-o-q, compared to the 1.3% increase in the previous quarter. For the whole of 2019, prices of private residential properties increased by 2.7%, compared to the 7.9% increase in 2018. In all, 2,443 new private residential homes were sold last quarter, bringing the total new home sales volume in 2019 to 9,912 units. The latter reflects a 12.7% y-o-y increase in the number of new units sold compared to the year before, which recorded 8,795 new units transacted. Ismail Gafoor, CEO of PropNex Realty, says: “Singapore’s property scene has demonstrated resilience despite global uncertainties, with investors and upgraders taking advantage of rightly priced developments”.

Table: URAHe adds: “Our data shows that more than 50% of the new launch sales in 2019 was contributed by projects that were launched in prior years. This was a result of lower land bid prices undertaken by developers. This allowed developers to adopt attractive prices to attract buyers and investors.”He expects a similar trend to follow this year, with already launched new projects in 2019 taking up the lion’s share of the new private residential market this year. Christine Sun, head of research and consultancy at OrangeTee & Tie, says: “We remain sanguine about the private residential market as Singapore’s economic fundamentals remain strong and buying sentiment had been robust. This year, we expect to see more luxury home sales as many projects in prime locations are slated to be launched.”She adds that fewer new projects are expected to be launched this year compared to 2018, especially for mega-sized developments of more than 1,000 units. But the new home sales volume is likely to closely match the sales figure last year, given a brighter economic outlook and positive buying sentiment.

Chart: URAThe last quarter also saw prices of landed properties climb 3.6% q-o-q compared with the 1% q-o-q increase in 3Q2019. This segment also recorded a price increase of 5.7% y-o-y for the full year. Meanwhile, prices of non-landed properties fell 0.3% q-o-q in 4Q2019, against the 1.3% q-o-q increase in the previous quarter. Overall for the whole of 2019, the non-landed property segment saw prices increase by 1.9% y-o-y. The private resale market also moved 2,342 transactions in 4Q2019, compared to 2,378 units in the previous quarter. The number of resale deals accounted for about 48% of all sale transactions in the quarter, compared to 41.3% in the previous period. But overall, the resale market saw 8,949 deals in 2019, falling by 31.2% when compared to 2018, which saw 13,009 transactions. But according to Gafoor, “based on a quarterly basis, the private resale market rebounded from the lower volume immediately after the property cooling measures [in 2018] to a stable demand of over 2,300 units in the last three quarters [of 2019]. Resale property prices are generally 10% to 20% lower as compared to some of the newer launches.” He expects resale volume to exceed 10,000 units this year.

This year could see more luxury home sales as many projects in prime locations are slated to be launched. There will also be fewer new projects launched this year compared to 2018, especially for mega-sized developments of more than 1,000 units, says Christine Sun, head of research and consultancy at OrangeTee & Tie. In the pipeline is a total supply of 49,173 uncompleted private residential units (excluding ECs) which have already received planning approvals. Of this number, 30,162 (61.3%) remained unsold at the end of 4Q2019, compared to 31,948 units at the end of the previous quarter. On top of a supply of 3,192 EC units already in the pipeline, there were 52,365 units in the pipeline with planning approvals at the end of the last quarter. Of the EC units, 2,110 units remained unsold.In addition, there is a potential supply of 6,050 units (including ECs) from government land sales (GLS) sites and successful private en-bloc sales which have not yet been granted planning approvals. This comprises about 5,500 units from awarded GLS sites, sites on the Confirmed List that have not yet been awarded, as well as about 550 units from private en-bloc sale sites.

Based on the expected completion dates reported to the URA by developers, about 6,922 units (including ECs) are set to be completed this year. Another 10,579 units (including ECs) will be completed next year. Lee Sze Teck, director of research at Huttons Asia, says: “With en-bloc activity subdued and the supply from GLS sites at a low, residential unsold supply is expected to be reduced further in 2020. Looking at the past eight years where we had major policies changes, once the unsold supply goes below 20,000 units (which might possibly occur in 2021), developers may start actively looking for land again and a new property cycle could begin.”

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