While there was some kind of increase in the prices of private homes, the chances were not that significant from one quarter to another, until recently. 2018 brought along a lot of surprises, one of them being the increase of 3.9% recorded in the case of homes belonging to the private residential sector. According to the information released by the Urban Redevelopment Authority, or URA, the estimated increase was of only 3.1%, no one expecting such a consistent increase. This is the most abrupt increase since 2010, the last time when prices grew in an unexpected manner, reaching a peak of 5.3%.
This rise comes after a period in which things moved very slowly and even sunk under during some months of the year. Thus, the evolution of the private homes sector recorded slight increases last year, enjoying price growths of only 0.7% in the 3rd quarter and 0.8% in the 4th quarter, after decreasing and recorded negative values in the 2nd quarter of the year. But, at the beginning of 2018, things changed, non-landed properties being the ones that took the lead of this increase, with a whopping growth of 4.4%, in comparison with the 0.8% increase they recorded in the previous year. Concerning landed properties, they enjoyed an increase of 1.9%, last year barely reaching a rise of 0.5%.
Taking a closer look at price increases according to regions, the Outside Central Region got the highest percentage, of 5.6%, which is more than impressive considering that last quarter brought increases of only 0.8%. Next comes the Core Central Region, with a price increase of 5.5%, compared with 1.4% of the last year, and the Rest of Central Region, with an increase of 1.2%, compared with 0.4%. The vacancy of private homes also suffered a small change, dropping with 0.4%, reaching this way a percentage of 7.4.
Edmund Tie & Company’s head of research, Lee Nai Jia, stated that the private Singapore Condos market is strongly following an upward trend, the increase of prices in this sector being highly stimulated by the demand that is going stronger, due to home buyers from outside the country and Singaporeans that are looking for a new and better home. Also, the chief executive officer of PropNex Realty, Ismail Gafoor, said that the action unrolled by both home buyers and developers is very visible at this point, being translated on the market through numerous collective sales and land bids that are quite aggressive. And, according to specialists, the rise in the private sector is not about to stop. Price increases are expected throughout the year, Mr. Gafoor predicting increases that will reach 8, even 10%. This kind of growth will be triggered by considerably higher prices of the units belonging to new developments, which will drag the rest of the private residences along.
But, Dr. Lee makes even more impressive predictions, taking into account the increasing demand for private homes. He believes that the increase could reach 12%, in spite of the fact that there is a supply of properties that have yet been sold. Still, he believes that this supply will not cut the wings of this price growth, as the supply will soon be assimilated due to the increasing demand on the market.
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