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Property Price Index Continues Trending Upwards

On 1 October 2019, Singapore’s Urban Redevelopment Authority (URA) released the flash estimate of the price index for private residential property for 3rd Quarter 2019.

Overall, the private residential property index increased 1.4 points from 150.8 points in 2nd Quarter 2019 to 152.2 points in 3rd Quarter 2019. This represents an increase of 0.9%, compared to the 1.5% increase in the previous quarter.

Prices of non-landed private residential properties increased by 2.9% in Core Central Region (CCR), compared to the 2.3% increase in the previous quarter.

Prices in the Rest of Central Region (RCR) increased by 1.6%, after registering an increase of 3.5% in the previous quarter. Prices in Outside Central Region (OCR) increased by 0.7%, compared to the 0.4% increase in the previous quarter.

List SIR House View

The house view of List Sotheby’s International Realty, Singapore, is that with the second consecutive quarter of increase (1.5% in Q2 & 0.9% in Q3), the residential PPI is now showing a gain of 1.7% from end-2018. 

The rise was largely supported by the non-landed segment which showed a rise of 1.7% q-o-q. Landed prices, showed a 2.2% decline instead.

Q3 2019 is likely to be the best performing quarter in 2019 with more than 3,000 new sales and 1,600 resales.

Prices in CCR were mainly driven by transactions in the resale market. Some of the notable developments there include 3 Orchard By-The-Park, South Beach Residences & Marina One Residences.

Prices in RCR and OCR were mostly driven by new sales, some of which achieved new benchmarks for their locations. Examples include Sky Everton by Sustained Land, One Pearl Bank by City Developments Limited, Avenue South Residence by UOL Group and Parc Clematis by Singhaiyi Huajiang Sun Pte Ltd.

Outlook for Q4 2019:

The likely new launches for the rest of the year include EDEN by Hong Kong developer Swire Properties, Midtown Bay by GuocoLand, Pullman Residences, RoyalGreen, Urban Treasures, Sengkang Grand Residences, The Midwood, among others.

It is estimated that new sales volume could be 1,600-1,800 units for Q4 2019. Total new home sales for the whole of 2019 could reach 8,600-8,800 units if the roughly 7,000 units sold in the first three quarters were added in. This is similar to the 8,795 units sold in 2018.

We expect prices of non-landed properties to rise marginally and the price index may increase by a total of 3% y-o-y. However, prices of landed homes seem to be soft and may register a marginal fall of 1% for the whole year. The net effect is likely to be a rise of 2% y-o-y in the overall URA Price Index in 2019, compared with a 7.9% increase in y-o-y the year before.

The new income ceiling for Executive Condominiums and HDB flats could siphon away a small portion of the demand from mass market condominiums.

The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up till mid-September. The statistics will be updated on 25 October 2019 when URA releases its full set of real estate statistics for 3rd Quarter 2019. Past data have 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.