1Q 2018 sets the tone for the real estate market robust turnover in 2018. OCR region experienced highest price growth of 5.6 per cent since Q2 2010
URA’s Q1 2018 data shows that prices of private homes in Singapore rose by 3.9 per cent quarter-on-quarter (Q-o-Q) from 138.7 points (Q4 2017) to 144.1 points (Q1 2018) a record price since Q2 2010 where prices rose by 5.3 per cent. This reflects a clear sign of positive market sentiments in the private residential segment, having witnessed three consecutive quarters of price increase thus far. Positive growth is apparent across the regions in Q1 2018 with OCR experiencing highest price increase amongst all regions at 5.6 per cent growth, while CCR and RCR enjoyed 5.5 per cent and 1.2 per cent growth respectively. This is the highest price growth for OCR since Q2 2010 where price increased by 5.7 per cent.
CEO PropNex Realty, Mr Ismail Gafoor commented, “Moving into 2018, we can see buyers and investors now taking action in both new and resale segments, propelled by the ongoing market exuberance with the bullish lands bids and continuous collective sales. As expected, the year starts off with a record 3.9 per cent growth. We foresee that prices are set to increase by up to 5 per cent as well by the first half of the year. Overall, 2018 will witness a price growth of 8 to 10 per cent, mainly contributed by higher price points at new launches which will in turn bring up the overall selling prices of the resale and existing launches moving forward.”
Continuing the streak of robust transactions in previous quarter, even with the lack of new launches in the first quarter of the year, overall volume of private residential homes (New Sale, Sub Sale and Resale) totalled 5,328 transactions in 1Q 2018. This is 126 units higher compared Y-O-Y to Q1 2017 where 5,202 units were recorded.
Resale segment took the lead with 3,666 units, a 69 per cent increase (1,496 units) from Q1 2017.
Mr Ismail added, “First quarter numbers clearly demonstrate rebound in the real estate market, the resale property market has performed well with increase of 69 per cent year on year, highlighting the greater demand of en blocers finding replacement homes in the resale market, coupled with attractive price points of resale properties in comparison to some of the new launches. Resale segment also performed better than the New Sale segment (1,581 units) due to two reasons. Firstly, most of the existing stocks (of new projects) have been absorbed in 2017 and there is limited supply of new launches in Q1 2018. However, we expect the new launch segment to pick up with more developments lined up for launch in the second half of the year.”
For 2018, Mr Ismail predicts that transaction volume of private property will be well above the 25,000 mark, the highest since year 2013 where transaction volumes started falling after the cooling measures were implemented.
4,458 public home transactions recorded in Q1 2018
In Q1 2018, Prices of Public Housing experienced its highest decline (-0.8 per cent) for the past nine quarters since Q1 2016. Mr Ismail highlighted that the continuous price decline into 2018 is highly attributed to few factors, different group of sellers who are in urgent need to dispose their properties within stipulated time: second timers who received their new keys with the completion of their BTO flats, new Executive Condominium upgraders who received the new keys to their homes and also those who are selling their resale flats in pursuit of upgrading to private properties in 2018. This has inadvertently created an on stream of supply of resale flats and also kept the prices muted for the past few quarters.
Mr Ismail shared, “With the positive sentiment in residential market as well as huge number of en bloc sales in 2017 and 2018, we predict a greater demand for HDB resale properties with some en bloc owners considering bigger sized resale flats in the second half of the year. There is a likelihood that HDB prices may well experience a muted growth of up to 1 per cent in 2018.”
The HDB resale segment also witnessed 4,458 transactions this quarter. Mr Ismail believes that it will cross the 5,000 mark in the second quarter, paving the way for close to 24,000 units transacted by end of 2018.