Private home prices up 3.8% in Q 3 but price growth seen easing amid headwinds, cooling measures
Private home prices up 3.8% in Q 3 but price growth seen easing amid headwinds, cooling measures. Following a 3.8% increase in Q3, private home prices may grow more slowly in Q4 due to economic headwinds, the newest round of property cooling measures, and the end-of-year seasonal slump. The increase in Q3, the tenth consecutive quarter of rising prices, surged from 3.5 percent in Q2 and was higher than the 3.4 percent flash estimate released earlier this month by the Urban Redevelopment Authority (URA).
Lee Sze Teck, senior director (research) at Huttons, predicts that private home prices will rise by 1 to 2% in Q4, but that full-year price growth will be between 9 and 10%. Private property prices increased by 8.2 percent in the first three quarters.
“The new measures could engineer a soft landing, with new private house sales growth and price rise to moderate in the next 12 months,” according to CBRE. The government enacted new property cooling measures in September to curb demand and ensure careful financing. Song, on the other hand, does not anticipate a crash, citing stable household financial sheets, minimal unsold inventory, and a robust rental market as reasons.
Cushman & Wakefield anticipates a slowing in price increase, but believes developers are unlikely to reduce pricing at new launches. “Unsold inventory is low, while land acquisition and construction expenses remain high,” he said. In light of potentially lower demand due to higher interest rates and an economic slowdown, developers are likely to slow their launch progress and re-calibrate their marketing strategies.”
The higher private home prices in Q3 were led by prices of non-landed homes, which grew 4.4 per cent in Q3 after notching a 3.6 per cent gain in the previous quarter.Non-landed home prices in the outside central region (OCR) increased the greatest – by 7.5% – thanks to significant launches AMO Residence, Lentor Modern, and Sky [email protected]; these developments saw brisk sales even at benchmark prices. As a result of demand from HDB upgraders, the median price of units sold at those projects in Q3 was all above S$2,100 per square foot (psf). In comparison, non-landed property prices in the OCR increased by 2.1% in Q2.
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