Experts have forecasted a rise in private home prices in Singapore by the end of the year 2018. Private residential prices did come down by around 11.6% by Q2 2017 as per studies but only 5-6 quarters of recovery is all that is required for them to go up again in case the present momentum is sustained. A new rise in private home prices is being forecasted with several new launches being rolled out by top developers on lands which have been acquired by them at higher prices.
As per studies, private home prices have already gone up for the fourth quarter in succession with a rise of 3.4% being observed in the second quarter of 2018 post a rise of 3.9% in the first quarter. The private residential price index has now touched 3.6% below the previous peak in the third quarter of 2013 and remains 9.1% higher as compared to the last dip in the second quarter of 2017. The price index in case of non-landed private homes in Q2 2018 is around 1.7% lower than the Q3 2013 peak pricing as per estimates.
These market trends should propel Singapore property prices to their peak levels over the next couple of quarters as per experts. The peak pricing levels could be surpassed by Q3 2018 as per some experts with several launches across market segments expected this year as well. New benchmark prices will be seen for several new launches due to higher costs of land. Volumes for transactions went up by around 14.2% for Q2 as compared to the first quarter with a rise of 48% in new sales volumes. Sub-sale and resale volumes remained on the flatter side however.
The rise in prices was majorly spurred by an increase of 3.8% in landed home prices and prices also went up by 3.3% for non-landed homes. Land prices had already gone down considerably as compared to non-landed prices between the years 2013 and 2017 and the increase in prices during this cycle of recovery was lower as compared to non-landed properties. Buyers have been attracted to the landed market since these prices seem more enticing.
Prices also jumped up over the city, fringe zones and RCR (Rest of Central Region) to the tune of 5.7% for the second quarter. An increase of 1.2% has been observed in the first quarter. Transaction volumes went up by 34.2% in Q2 for the RCR and new sales volumes comprised of 45.8% of transaction volumes. The median prices touched S$1, 665 per sq. ft. for the RCR in the quarter which is higher than the first quarter by 12.7%. The recovery of the residential market is expected to happen for the upcoming 1-2 years based on multiple aspects like the employment scenario, economic conditions, resale market conditions and demand for new residential projects which could launch at considerably higher prices for various locations.
