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Private home prices continue to moderate in third quarter
Singapore Property Market News and Analysis

Latest Property Real Estate News - Published on 28/10/2011

The private property price index climbed to yet another record high of 205.7, as the latest data released by URA. However, the 3Q11 data also revealed that growth of private home prices has slowed for the eighth straight quarter since 4Q09.

The overall increase is a mere 1.3% Q-on-Q, down from 2.0% the previous quarter—the lowest percentage increase for the last eight quarters. Growth was most evident in the Outside Central Region (OCR), which grew by 2.1% to 190.8, as compared to 1.2% to 188.8 for the Rest of Central Region (RCR) and only 0.7% to 209.4 for the Core Central Region (CCR). Singaporeans are still keen in the purchase of landed properties especially the smaller homes like terrace and semi-detached houses as the price index remains at 3.9% and 3.7% respectively. This trend is expected to continue as it is not affected by foreign investment.

Cooling Measures and Global Economic Uncertainties Tempered Exuberance

“The series of cooling measures between September 2009 and January 2011 have been effective in the price growth slowdown. As such, it is not startling to see the private home price growth slowdown continuing in 3Q11, especially when coupled with the ongoing uncertainty in the global economy” commented PropNex CEO Mohamed Ismail.

Sellers have been pricing their properties more realistically in order to keep it affordable for HDB upgraders, as more than 10,000 new private homes are expected to be released in the market in the second half of 2011, which will give potential buyers more options in other locations around Singapore.

Continued Strong Demand for Private Homes in 3Q11

Despite the global economic weakening, demand for private homes remained healthy, with primary home sales (excluding ECs) averaging over 1,455 units per month in July, August and September. This is in spite of the of the Hungry Ghost month from 31 July to 28 August where there was no let-up in launches and take-up in August compared to June and July, which shows that the market is not superstitious in the face of strong buying sentiment.

EuHabitat, The Luxurie and Boathouse Residences were launched in August and had accounted for almost 60% of all primary sales in August. The market continued to be active in September as developers launched several projects such as A Treasure Trove and The Meyerise, and sales were brisk for these projects.

HDB Owners Are Upgrading Into the Private Home Segment
“With the rising HDB resale prices and historically low interest rates, potential HDB upgraders are continuing to look for private homes, especially mass market homes in the OCR. As many of these buyers are buying for owner-occupation and investment beyond four years due to the seller’s stamp duty measure, they probably take a longer-term view and are thus less worried about the current global economic uncertainties,” stated Mr Ismail.

Slower Price Growth for 2011

Taking into account the possible worsening global economic situation—which might eventually affect buying sentiment, the price growth may still continue to slow. However, with the low interest rates coupled with the strong fundamentals of land scarcity, Mr Ismail predicts 6 to 6.5% price increase overall for year 2011.



For media enquiries, please contact:
Carolyn Goh
Corporate Communications and Marketing Manager
P & N Holdings Pte Ltd (holding company of PropNex Realty)
480 Lorong 6 Toa Payoh #10-01 HDB Hub East Wing Singapore 310480
DID : (65) 6829 6968 / 98287834 | Main : (65) 6820 8000 | Fax : (65) 6829 6600

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