S’pore private property prices jump 3.2% in Q2; strong demand for new condo launches

SINGAPORE – Private home prices have bounced back in the second quarter of the year as buyers show strong demand for new launches.

This comes after a price growth slowdown in the first quarter, which some analysts said was a knee-jerk reaction to the latest round of property curbs introduced in December last year.

Overall, private home prices rose by 3.2 per cent in the second quarter, fuelled mainly by the non-landed private home segment, which grew by 3.3 per cent, according to flash estimates from the Urban Redevelopment Authority on Friday (July 1).

Analysts said the pick-up in price growth was driven largely by strong buying demand for new condominium launches that were sold at higher benchmark prices, after a lull period in the first quarter of this year.

Compared with the mere 0.7 per cent price growth in the first quarter, the price index has returned to a similar range as seen before the property cooling measures kicked in last December, said ERA Realty head of research and consultancy Nicholas Mak.

PropNex Realty chief executive Ismail Gafoor said the price growth was surprising given the many uncertainties in the current market, such as rising interest rates, inflation, and the stock market turmoil.

“This perhaps speaks of the resilience of the housing demand, largely underpinned by Singaporean buyers,” he added.

Price growth for non-landed private homes was driven mainly by new launches in the city fringe, or the rest of central region, where home values rebounded by 6 per cent in the second quarter, reversing the fall of 2.7 per cent in the first quarter.

Buying activities in the city fringe sub-market were propped up by strong demand for new launches such as Piccadilly Grand in Farrer Park and Liv @ MB in Mountbatten, which were launched in May.

Mr Gafoor noted that both projects clocked robust sales with average prices at $2,182 per sq ft at Piccadilly Grand and $2,409 per sq ft at Liv @ MB.

Ms Tricia Song, head of research for South-east Asia at CBRE, noted that both projects set new benchmark prices as developers held firm on their asking prices amid higher construction costs and low unsold inventory.

“The strong showing at the two projects might be indicative that investment and genuine demand and liquidity for well-located projects are still relatively strong despite recent cooling measures and global economic headwinds,” said Ms Song.

“Some buyers could also be locking in mortgage rates ahead of anticipated further interest rate hikes, especially since selling prices at future launches are likely to remain elevated with land prices staying firm,” she added.