Private home prices and HDB resale prices continue to increase in the second quarter of 2021, showed the URA and HDB flash estimates.
Singapore saw private home prices and HDB resale prices continue to increase in the second quarter of 2021, albeit at a slower pace.
The latest flash estimates from the Urban Redevelopment Authority (URA) showed that private home prices climbed 0.9% in Q2 2021, which is much slower compared to the 3.3% hike registered in the previous quarter. On an annual basis, private home prices increased 7.3%.
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Christine Sun, Senior Vice President of Research and Analytics at OrangeTee, noted that this marks the market’s fifth consecutive quarterly increase.
The hike in prices in Q2 2021 was mainly driven by non-landed homes within the Outside of Central Region (OCR) which rose 1.8% quarter-on-quarter. Prices rose the fastest in OCR since it has the leanest supply of new homes.
Price increment for the Rest of Central Region (RCR) was less significant at 0.3%, down from the 6.1% growth posted in Q1 2021. Meanwhile, the Core Central Region (CCR) recorded a 0.6% increase.
Price growth for landed homes was also slower at 0.8%, compared to the previous quarter’s 6.7% increase.
“After a strong run-up prices in Q1 2021, some landed home owners have raised their asking prices, putting them out of reach of some buyers, resulting in a pullback and slower price gains in Q2 2021,” said Huttons Asia CEO Mark Yip.
Sun attributed the slower pace of price growth to fewer new launches during the Phase 2 Heightened Alert period and fewer supply of new homes due to construction delays and labour crunch.
“As resale homes formed a higher proportion of transactions last quarter, the overall price index was pulled down by the lower prices. According to caveat data from URA, 60.5% of landed and non-landed homes were resale homes, higher than the 56.6% in the first quarter of this year,” she added.
Over at the HDB resale market, prices increased 2.8% in Q2 2021, lower than the 3% hike registered in the previous quarter, showed flash estimates from the HDB.
“The slower price increase could be due to low volume and resistance towards paying more in cash over valuation (COV) among buyers,” said Yip.
In fact, transaction volume during Q2 2021 is estimated to be 8% lower than the previous quarter.
“Almost all 26 towns saw lower transacted volume in Q2 2021 except for Bukit Merah, Choa Chu Kang and Marine Parade,” shared Yip.
“The lower volume is due to the restrictions imposed on viewings during Phase 2 (Heightened Alert),” he said, noting that there is generally keen interest for resale flats amid delays in completion of new homes.
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He added that a total of 106 HDB flats were transacted for at least $1 million in the first half of 2021, compared with 82 such transactions last year and 64 in 2019.
With this, Yip expects the number of million-dollar flat transactions to exceed 200 this year.
“While it may make headlines for the transacted value, such transactions are less than 1% of the whole year transaction volume,” he said.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: email@example.com