While overall house prices maintained their steady rising trajectory in 2021, property experts expect private property prices to continue their upward trajectory as the year draws to a conclusion.
Prime area homes, which had lagged far behind their peripheral region counterparts, have showed indications of increased demand. Consider what has occurred and some of the potential explanations:
The condominium market continues to gain traction, rising for the sixth straight quarter. URA flash estimates indicate prices creeping up to approximately 0.9 per cent, largely comparable to the rate established in Q2 (0.8 per cent increase) (0.8 per cent rise).
While small, Q3 exceeded forecasts in the majority of cases. The combination of the Heightened Alert (July to August) and the Seventh Month Festival (August to September) was expected to result in a much colder market in Q3. As it turns out, the majority of purchasers have dismissed these worries.
Prices fell 0.6 percent in the Core Central Region (CCR), compared to a 1.1 percent rise in Q2.
Interestingly, the hot Outside of Central Region (OCR) market witnessed a reduction in pricing as well; approximately 0.2 percent, down from 1.9 percent the previous quarter. This is despite the fact that the bulk of top sales — at least for August – originate in this area.
The RCR saw the greatest rise, with prices increasing by 2.2 percent. RCR house prices increased by just 0.1 percent in the preceding quarter. However, this is mostly due to the Normanton Park and Avenue South Residence developments, where developers increased prices.
Condo prices in the CCR averaged $2,387 per square foot, while those in the RCR averaged $1,781 per square foot. Prices in the OCR averaged $1,374 per square foot.
Notably, all other projects, with the exception of Leedon Green (CCR), Normanton Park (RCR), and Avenue South Residence (RCR), were located in the OCR.
In 2021, there will be an increase in demand for luxury houses. For example, in August, Les Maison Nassim witnessed a jaw-dropping sale valued at $5,786 per square foot, or $35 million, setting a new monthly record.
Park Nova at Orchard, which just opened, has already sold 18 apartments at an average price of $5,016 per square foot. It’s no mean accomplishment, considering the enormous sizes and correspondingly big units. The lowest unit sold there so far was for $6.7 million — a sum sufficient to purchase a landed house in a good area.
Due to the limited supply of these boutique homes, purchasers who are unable to acquire a unit are likely to look to the larger CCR market. If this is the case, the area will see an abundance of new launch in 2021, including Canninghill Piers, Perfect 10 and 33 Devonshire.
The second factor is the reintroduction of wealthy overseas purchasers. Certain international events, such as China’s crackdown on internet moguls, are also contributing to this; and, as a result of political instability, our nearest rival real estate market – Hong Kong – may not be as feasible at the moment.
Demand from Foreign Buyers
The most obvious indication is that 16% of purchases in the Core Central Region in July and August 2021 were made by foreigners, more than tripling the 8% observed in Q2.
Indeed, several realtors have suggested that price declines may be linked to this. Developers trying to attract rich Chinese customers may reduce the price somewhat in order to increase awareness and generate further momentum.
Finally, border controls have been relaxed, indicating more activity from foreigners interested in purchasing property in Singapore, particularly individuals from Taiwai, China, Macau, Hong Kong, Australia, and Malaysia, as Singapore continues to open up.
Despite Covid-19 and viewing problems, developers with CCR products are likely in for a smooth ride in 2021.
Price Softening in CCR provide Buyers with a Good Entry Price
It’s difficult to glean too much information from a single quarter. However, considering the market’s wild ride, any indication of a slowdown is welcome news for first-time homebuyers/upgraders. Nonetheless, realtors have noted a dearth of new releases in the peripheral areas in comparison to the last bumper harvest.
Given the increase of upgraders who prefer the OCR, this is still a limited supply. As such, you may want to explore resale.