It is both a good and bad news for Singapore’s economy as the price of private homes (both new launch and resale condo) witnessed a surge while it saw a decline in HBD resale homes in the first quarter of the year 2018. This is the highest rise recorded since 2010. Urban Redevelopment Authority and the Housing Board released this data yesterday.
Shedding light on the public property market, it can be safe to say that it remained on the lower side. Similar to this year, the HDB resale prices also showed a decline last year as well. The decrease in price registered last year was 1.5%.
The major reasons why the prices are witnessing a downward trend include a rise in housing grants and balance flats re-offer scheme. Furthermore, reduced BTO waiting time also contributed to this decline. However, Mr. Eugene Lim, the executive offer of ERA Realty Network, suggests that despite the reduction in price, the situation is not daunting as the fall in prices is nominal. With the introduction of new schemes by the government, it is expected that more buyers will show their interest in reselling flats.
Stats show that the prices of private homes have shown a rise of 3.1% in comparison to the previous quarter. On the other hand, the drop in the HDB resale prices amounted to 0.8%. It was 0.2% in the preceding quarter.
As per Mr. Lim, the surge in the prices of resale and new launch condo is a symptom of an upswing trend. He further believes that due to the fear of increased prices in the near future, more and more buyers are showing interest in purchasing private homes. Sellers, capitalizing on this opportunity, have increased the rates. The result is there for everyone to see – increased rates in the first quarter of 2018.
Property experts in Singapore are of the view that this upward trend is likely to continue to grow in this year. As per Mr. Ismail Gafoor, chief executive of PropNex Realty, up to 5% increase in price is expected by July 2018.
Nicholas Mak, executive director of ZACD Group, is of similar views as Eugene Lim. He also believes the fear of buyers contributed a great deal to the increase of prices. As per him, sellers sensed the increase in price in the last year. Thus, they escalated the asking price. This urged buyers to purchase homes as soon as possible as they believed the prices are going to rise even more in the future. He also believes that the overall private home price index is expected to rise up to 15% from 8% during this year.
On the other hand, both Mr. Ismail and Mr. Lim are of the view that the expected rise in the index is 2% i.e. it will rise from 8% to 10%. The current private property index has increased at the rate of 4.6% as compared to last year.
As per the URA, non-landed private residential properties saw a surge of 5% in the prime area during the first quarter. In the previous quarter, the 1.4% increase was noted. However, the prices in the city fringe increased by 1.1% while in the previous quarter, the surge was 0.4%. The data also shows that suburb area prices increased by 3.8%. The previous quarter increase in the same region was 0.8%.