The overall price index for private homes fell 1.2 per cent in Q1 of 2020 relative to the previous quarter, according to flash estimate released by the Urban Redevelopment Authority (URA) on Wednesday (1 April).
Quarter-on-quarter comparison with Q4 of 2019 shows that there was a 0.5 per cent increase in the index whereas year-on-year comparison shows a 2.2 per cent increase. For non-landed properties, prices fell 0.3 per cent in the previous quarter before easing 1 per cent in Q1 this year quarter-on-quarter.
Based on regional area, the prices of non-landed homes in the core central region dropped 1.5 per cent in Q1 of this year, according to URA. This is a smaller rate of decrease in comparison to the 2.8 per cent decline in the quarter before.
On the other hand, prices in the city fringe fell 0.5 per cent after declining 1.3 per cent in the quarter before. As for the suburbs, prices dropped 1 per cent compared to the 2.8 per cent rise in the quarter before.
The prices of landed properties declined 1.7 per cent in Q1 this year after increasing in Q4 of 2019 by 3.6 per cent, the URA stated.
Based on transaction prices given in data on units sold and contracts submitted for stamp duty payment by developers till the middle of March, the URA compiled the flash estimates. On 24 April, the URA will update the statistics as it publishes the full set of Q1 2020 real estate statistics.
In a press release, the URA stated, “Past data has shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution.”
Regarding the fall in prices for all segments, PropNex Realty’s Chief Executive, Ismail Gafoor remarked, “This can be attributed to three key factors caused by the Covid-19 outbreak. Firstly, a lack of foreign buyers as a result of restrictions in entering the country. Secondly, Singaporean buyers are more cautious, as they are concerned about their job security. Thirdly, developers are adapting to attractive pricing with low profit margin, which has led to lower prices.”
Amid the declines, a benefit lies in the US Fed slashing interest rates, which would get to “genuine buyers taking advantage of the situation and picking up rightly-priced projects”, Mr Gafoor hinted.
“However, under the current market sentiment, we are expecting URA’s overall private home price index to drop in the range of 2 per cent to 3 per cent this year,” he added.
Cushman & Wakefield’s Senior Manager for Research in Singapore and Southeast Asia, Wong Xian Yang noted, “Going forward, private home prices are expected to trend lower as Singapore heads into a recession. Buying sentiment is expected to remain muted over the short term until uncertainty in the labour market eases…However, prices may prove to be more resilient as compared to previous recessions. For example, during the Global Financial Crisis, URA’s overall private home price index fell by 24.9 per cent over four consecutive quarters.”
According to the Monetary Authority of Singapore (MAS), eligible individuals can apply for a deferment of their residential property loan payments until the end of 2020.
“This indirectly helps support current prices as property owners have more breathing space to navigate any cashflow difficulties. The government has also released a massive Covid-19 resilience package which should help stem job losses. For now, fire sales are not expected, as unemployment rates remain relatively low and most property owners are not under huge pressure to sell,” Mr Wong concluded.
Subscribe
Login
0 Comments
