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Expensive city fringe homes drive Singapore price hike in Q1

The overall price index for private residential properties rose by 3.3%.

Investors around the world are pouring money into the real estate and equity markets in hopes of a broad-based economic recovery. According to OrangeTee, pent-up demand bolstered by massive fiscal stimulus and still-low mortgage rates is propping up home prices worldwide. Property prices are accelerating across many countries including Australia, China, the U.S., parts of Europe, India and Canada. Home prices are hitting new highs in some cities. 

Prices of private homes in Singapore have similarly increased in tandem with the uptrend observed globally. A combination of strong domestic demand for private homeownership and the resurgence of foreign investment demand has pushed home prices higher last quarter. 

Here’s more from OrangeTee:

The overall price index for private residential properties rose by 3.3 per cent, higher than the 2.1 per cent increase in the fourth quarter of 2020, data from the Urban Redevelopment Authority (URA) showed. This is the fourth consecutive price increase and the steepest quarterly rise since Q2 2018 (3.4 per cent).

The price increase in Q1 2021 was mainly driven by non-landed homes in the Rest of Central Region (RCR) which rose by 6.1 per cent quarteron-quarter (q-o-q). In contrast, the price increment was less significant for the Outside of Central Region (OCR) at 1.1 per cent while prices rose by 0.5 per cent in the Core Central Region (CCR). Prices of non-landed homes in RCR and OCR have reached their record highs last quarter. 

The price increase in Q1 2021 was driven by more sales of pricier city fringe homes. Normanton Park, which registered the highest transaction of 731 units were sold at an average price of S$1,765 psf. Further, many projects were transacted at an average price of S$2,000 psf and above. Among them were The Reef at King's Dock sold at an average price of S$2,304 psf (341 units), followed by Amber Park (S$2,438 psf, 97 units), Avenue South Residence (S$2,131 psf, 54 units) and One Pearl Bank (S$2,458 psf, 43 units). 8 units at Sky Everton were sold at S$2,740 psf while 4 units at Meyer Mansion were transacted at S$2,659 psf.

More luxury new projects were transacted at an average price of S$2,400 psf. Some of these projects include Midtown Modern (S$2,774 psf, 366 units), RV Altitude (S$2,695 psf, 84 units), The M (S$2,637 psf, 36 units), Royalgreen (S$2,714 psf, 19 units), Leedon Green (S$2,652 psf, 23 units) and The Avenir (S$3,039 psf, 18 units). 

According to the quarterly statistics released by the Urban Redevelopment Authority (URA), 8,100 private homes excluding EC were sold in Q1 2021, 16.9 per cent higher than the 6,929 units transacted in the preceding quarter. 

New home sales rose 34.2 percent from 2,603 units in Q4 2020 to 3,493 units last quarter. The number of resale transactions increased 6.4 per cent quarter-on-quarter (q-oq) from 4,249 units in Q4 2020 to 4,519 units in Q1 2021. 

Rumours of new cooling measures sparked some panic buying at the beginning of the year as some buyers rushed to secure units for fear that their buying eligibility could be affected by new measures. This also coincided with the launch of the mega projects Normanton Park and the Reef at King’s Dock. Sales later slipped in February due to the Chinese New Year festivals but picked up slightly in March with the launch of the integrated project Midtown Modern.

 

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