Private home prices up 3.5% in Q2 as market rebounds on record launch prices, increased volume
Private home prices up 3.5% in Q2 as market rebounds on record launch prices, increased volume. Private residential property prices rose 3.5 percent in the second quarter compared to the previous quarter, exceeding the 3.2 percent flash estimate released earlier this month as well as the 0.7 percent increase recorded in Q1. Analysts believe that the increase in the price index for private homes, which occurred despite headwinds such as inflation, rising interest rates, and the possibility of a recession, was due to new launches on the city outskirts, the return of foreign buyers, and firm demand.
Prices of landed properties increased by 2.9 percent in Q2 after increasing by 4.2 percent the previous quarter, according to data released by the Urban Redevelopment Authority (URA) on Friday (22 July); prices of non-landed homes increased by 3.6 percent, reversing a 0.3 percent decline previously. The 3.5 percent increase was driven by two successful city-fringe property launches in Q2, which resulted in a 6.4 percent increase in non-landed property prices in the Rest of Central Region (RCR). Piccadilly Grand near Farrer Park MRT station and [email protected] in Mountbatten both set 99-year leasehold property records in their respective areas. In the RCR, however, non-landed home prices fell 2.7 percent in Q1.
Meanwhile, non-landed property prices in the Core Central Region (CCR) increased 1.9 percent in Q2, compared to a 0.1% decrease in the previous quarter, while prices in the Outside Central Region (OCR) increased 2.1 percent, compared to a 2.2 percent increase in Q1. Eugene Lim, chief executive officer of ERA, stated that the immediate pullback following the December 2021 property curbs appears to be easing. According to URA data, developers released 1,956 unfinished private residential units (excluding executive condominiums or ECs) for sale in the second quarter, more than tripling the 613 units released in the first quarter. They sold 2,397 private homes (excluding ECs), which was more than the 1,825 units sold in the first quarter.
According to Edmund Tie’s Lam Chern Woon, with rising land and construction costs, developers are unlikely to lower the prices of upcoming launches. He also mentioned the shrinking inventory of unsold units. AMO Among the upcoming launches are Residence in Ang Mo Kio, Lentor Modern, an integrated mixed-use development, and Sky Eden @ Bedok. Nonetheless, Knight Frank’s Leonard Tay predicted that price increases would slow in the coming months as higher interest rates reduced homebuyers’ purchasing power. Despite the cooling measures, the price index rose by 4.2 percent in the first six months of this year. Analysts predict that sales volumes in the primary market will range from 8,000 to 10,000 units in 2022, with year-on-year price increases ranging from 5 to 8%.
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