Private home prices jump by 3.1% in first quarter
While the private property market registered the sharpest rise in prices since 2010, prices of HDB resale homes fell in the first quarter of this year, based on flash estimates released by the Urban Redevelopment Authority and the Housing Board yesterday.
Private home prices rose 3.1 per cent over the preceding quarter in the steepest quarter-on-quarter hike since the second quarter of 2010, when the index rose 5.3 per cent. In contrast, HDB resale prices registered a drop of 0.8 per cent for the same period, an acceleration from the decline of 0.2 per cent seen in the final quarter of last year.
ERA Realty Network key executive officer Eugene Lim said the positive numbers in the private property market indicated that a market recovery was well on track. "With almost all the cooling measures still in place, this indicates very positive market sentiment, and the market is on an upswing trend," he said.
Mr Lim believes more buyers are purchasing now for fear of bigger price increases going forward. "This, coupled with more opportunistic sellers who are revising their prices upwards, could have contributed to the higher -than-expected price increase in Q1, 2018."
PropNex Realty chief executive Ismail Gafoor said: "Moving into 2018, we can feel that buyers and investors are now taking action, propelled by the ongoing market exuberance with the bullish land bids and continuous collective sales in the market."
Analysts expect the positive sentiments in the private residential property market to continue. Mr Ismail added: "We predict that not only transaction volumes will pick up, but prices are set to increase by up to 5 per cent as well by the first half of the year."
ZACD Group executive director Nicholas Mak said: "Most of the home buyers and sellers observed the ever-increasing land prices paid by developers in the past year and deduced that future residential property prices will be significantly higher. As a result, some sellers have increased their asking prices, while some buyers are eager to buy before further increase in prices."
He expects URA's overall private home price index to rise by 8 per cent to 15 per cent for the whole of this year.
ERA's Mr Lim predicted a lower 8 per cent to 10 per cent rise, as did PropNex's Mr Ismail, who said: "The price growth will be 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."
The private property index is now up 4.6 per cent from a year ago. The URA said that prices of non-landed private residential properties increased by 5 per cent in the prime area or Core Central Region (CCR) in the first quarter, compared with the 1.4 per cent increase in the previous quarter.
In the city fringe or Rest of Central Region (RCR), prices rose 1.1 per cent, after posting a gain of 0.4 per cent in the previous quarter.
Prices in the suburbs or Outside Central Region expanded 3.8 per cent, following a 0.8 per cent increase in the previous quarter.
The public property market remains subdued. Last year, HDB resale prices fell 1.5 per cent, due to factors such as the increase in housing grants, the shorter waiting time for Build-To-Order (BTO) flats in certain housing estates and the introduction of the Re-offer of Balance Flats. Last month, HDB announced it would offer more flats with shorter waiting times, to help more young couples buy their first home.
But ERA's Mr Lim said the current situation is not worrying. "Although HDB resale prices have declined for six consecutive quarters, the decreases are rather marginal, 2.3 per cent over the period," he said, comparing it to 2014, when prices fell more than 1 per cent a quarter. "The Government has introduced several new measures designed to make HDB resale flats more attractive in the past year, and now that prices are dipping, more buyers would be willing to consider resale flats," he added.
Final numbers will be released later this month.