Despite the cooling measures and uncertain external environment, prices for private residential properties continued to increase in Q3 2018 of Singapore’s property market. The URA private residential property price index rose by 0.5 per cent q-o-q (quarter-on-quarter). The prices were supported by first-time home buyers and investors seeking Singapore properties for diversification purposes.

Tan Tee Khoon – Executive Director & Head, Residential
(Project Marketing), Knight Frank Singapore

Notwithstanding, sales in Q3 dipped as buyers’ sentiments were more subdued. Many buyers returned to the sidelines, adopting a “wait and see” approach. Sales were also slower in Q3 due to The Chinese Ghost Month in August. Based on the caveats lodged as at 19 October 2018, private residential sales including Executive Condominiums (EC) fell by 26.9 per cent q-o-q, and 27.7 per cent y-o-y (year-on-year). The Core Central Region (CCR) recorded an increase q-o-q in non-landed private residential price indices in Q3 2018 despite the cooling measures. However, the price index of non-landed homes in Rest of Central Region (RCR) eased by 1.3 per cent q-o-q. Notwithstanding the decline in the price index, the non-landed residential property sales in RCR rose by 9.9 per cent q-o-q due to the new launches.

Singapore’s affluence has attracted a lot of property investors

With the cooling measures in place, buyers became more price-sensitive. A case in point was Riverfront Residences, which sold a significant number of units below SGD 1.0 million in Q3 2018. Separately, projects of good design at choice locations, such as The Tre Ver, appealed to many buyers. There are signs that prices are staying stable, although the weaker economic outlook may exert negative pressure on prices and sales. Separately, the private residential rents showed signs of bottoming out, with the number of rental transactions trending upwards. With fewer completions in next year, we expect residential property rents to appreciate in 2019, provided the global economy remained robust.

“With various opportunities available in the market, projects in the Rest of Central Region and Core Central Region will potentially appeal more to first-time home buyers as well as owners that received their sale proceeds seeking replacement homes. Increasingly, buyers are placing more emphasis on the location attributes, design of the product, unique offerings and smart home features.” – Tan Tee Khoon, Executive Director & Head, Residential (Project Marketing), Knight Frank Singapore

Total supply of private homes – source Knight Frank Singapore

Market Insights
URA private residential price index increased by 0.5 per cent q-o-q in Q3 2018, with sales declining by nearly 27 per cent q-o-q to 5,812 units. Notwithstanding, total private residential sales were 87.1 per cent higher than 3,107 units transacted in Q3 2014. Sales volume reached a trough in 2014. While there is much supply in the pipeline, the impact is likely to be cushioned. This is because the developers are likely to introduce the new launches in phases. Additionally, we expect supply to start declining from 2019, subject to changes in Government policies.

Non-landed private home price index for RCR eased by 1.3 per cent q-o-q in Q3 2018 but sales of non-landed homes in RCR rose by 9.9 per cent q-o-q. Despite the pressure from slower sales in Q3 2018, non-landed private home prices were about 8 to 10 per cent higher from the trough in 2017. Buyers were more price-sensitive and discerning after the cooling measures. They had more options in the market, especially in the RCR region. Separately, the prices of Executive Condominiums (EC) inched upwards. We anticipate any new launches of ECs to be well-received, given that the prices of EC are lower than private condominiums.

Top 5 projects of Q3 2018 – source Knight Frank Singapore

Amongst the five residential projects with the highest transaction volume in Q3 2018, a significant share of the units transacted was of floor areas ranging from 500 to 800 sq ft. In addition, the average quantum of the units of this size was less than SGD 1.5 million

Sales in prime districts continued to move in Q3 2018. Based on the caveats lodged, Marina One Residences sold the most in CCR. Of the 45 units from Marina One Residences sold, some 8 units were larger than 2,000 sq ft at SGD 2,709 per sq ft. Non-Permanent Resident buyers were particularly active in CCR market segment. Check out this posh property to consider.

Conclusion
The prices of private residential properties are likely to stay flat for the last quarter of 2018, like buyers’ sentiments likely to remain subdued. New sale volume, however, is likely to vary by project. Buyers are likely to be drawn to projects in the RCR and CCR, as these residential properties remain relatively appealing amid the uncertain external environment.