4Q 2018 URA / HDB Real Estate Statistics
The URA’s 4th quarter statistics indicated a dip of 0.1% quarter-on-quarter (Q-o-Q) for the Overall Private Residential Price Index, with an overall price growth of 7.9% in total for the entire year of 2018.
The total transaction volume in 2018 with the inclusion of new sales, resales and sub-sales registered 22,139 units. This is a -11.5% % (Y-o-Y) decline as compared to 2017.
4Q2018 recorded a total 1,836 new sale units. This was a 39.0% (Q-o-Q) drop in the number of sales transacted as compared to the previous quarter. On the other hand, the 4Q2018 had a total of 1,971 resale transactions, registering a -26.2% (Q-o-Q) drop.
Chief Executive Officer of PropNex Realty, Mr. Ismail Gafoor said that, “The property cooling measures evoked two separate sets of market reactions, specifically for the new sale and resale market segments. In the new sale segment, the second half of 2018, experienced a better overall sales performance, despite the underlying presence of the property cooling measures. Developers of new launches were quick to react, by offering buyers and investors discounts, through the adoption of sensitive pricing strategies as well as offering more new launches in the second half of 2018, contributing to a 22.8% increase in the number of units sold.”
Mr. Ismail further added that, “In contrast, for the resale segment, the number of units transacted were lower in the second half as compared to the first half of 2018. It recorded a 44.5% decline in the number of units transacted. We believe that individual owners are being weary of adjusting their prices in the aftermath of the property cooling measures, as buyers decide to wait on the sidelines trying to comprehend the market sentiments.”
In relation to the private property market performance in 2019, Mr.Ismail, highlighted that “Looking towards the current year, we are expecting, close to 50 new launches. For instance, the availability of upcoming mega launches that has more than 1,000 units in its development such as Treasure at Tampines, the Former Normanton Park and Former Park West, providing a constant stream of new projects. “
With 35,649 unsold units (including ECs) with planning approval and an expected supply of 9,800 units (including ECs) from Government Land Sales (GLS) sites and awarded en-bloc sale sites that have not been granted planning approval yet, we can expect an anticipated 45,449 units available in the market, that will take some time to be fully absorbed.
As witnessed by the market performance in 2018, we are expecting that strategically positioned properties that provide locality appeal and those that are sensitively priced, will continue to garner interest in 2019. Hence, we believe that the new sale segment will likely to achieve a total of 9,000 units sold in 2019.
For the resale segment, it will be fuelled by en-bloc sellers who are looking for replacement homes. Therefore, Mr.Ismail is predicting that the resale segment, will likely be in the range of 10,000 to 11,000 in 2019.
For the entire year of 2019, we are anticipating that the total overall private residential transactions (new sales, resale and sub-sales) will potentially be 20,000 transactions, a drop of -9.7% as compared to 2018.
With regards to prices of private residential properties, Mr.Ismail envisioned that “With the private property prices moderating to insubstantial growth rates, on the heels of higher land bid prices and shifting mindset of buyers and investors, we are expecting that that the prices will likely be 1 to 2 per cent growth in 2019.”
The HDB Resale segment recorded 5,637 transactions in the 4th quarter of 2018. Observing a -20.2% (Q-o-Q). drop in the number of resale transactions as expected due to the festive season and school holidays. This summed up to a total of 23,099 resale flats in 2018, a 4.6% (y-o-y) increase compared to 2017 of 22,077 resale flats transacted.
With regards to the HDB resale prices, Mr.Ismail stated that “HDB resale flats will continue to remain as a safe haven for newly-wed couples, who are looking for readily available homes, as opposed to BTO flats that requires about 2 to 3 years of waiting time. Moreover, with the non-existence of cash-over-valuation in most transactions, it serves as a desirable option as their matrimonial homes.” He predicts that the HDB resale transaction volume will have a likelihood of 23,000 to 24,000 flats being sold in 2019.
In the area of prices, HDB resale flats encountered a price decline of -0.2% in the 4Q 2018. However, it recorded an overall of -0.90% for the entire year of 2018, showing signs of resiliency as compared to 2017. In concluding, Mr.Ismail foresees that the overall HDB resale price index will experience 1% growth in 2019.
February 15, 2019