The performance of executive condominiums in the suburbs or outside central region was the quarter’s largest driver of prices
In Singapore, property market players ponder over potential cooling measures as private home prices increase in Q2 2021, reported The Business Times.
According to flash figures recently revealed by the Urban Redevelopment Authority (URA), the overall residential price index jumped by 0.9 percent from the previous quarter, marking the market’s fifth consecutive quarterly rise.
Mark Yip, chief executive officer of Huttons Asia, said that prices increased by 7.3 percent compared to Q2 2020, and property curbs “remain a possibility”.
During the launch of the Monetary Authority of Singapore (MAS) annual report, managing director Ravi Menon mentioned that while the property market is not considered overheated at the moment, the implementation of such cooling measures would never be announced in advance.
Yip said, “Cooling measures are likely to be targeted at a certain group of buyers, such as multiple homeowners with higher ABSD (additional buyer’s stamp duty) or lower LTV (loan-to-value) or couples who decide to buy multiple homes to encourage prudence.”
Nicholas Mak, head of research and consultancy at ERA Realty, considers any cooling measures at this time as “not economically justified”.
“In the past 30 years, the residential property prices had increased at half the pace of nominal GDP growth. In other words, the growth in residential property prices is supported by economic fundamentals,” he said.
Yip added that additional measures discouraged some developers from launching new projects, increasing demand for the resale market. Meanwhile, Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said the trend towards larger homes may be led to lower per square foot prices for some locations.
“Space has become a valued asset as many homeowners saw their daily lives suddenly confined to their properties. Many owners were looking for homes with outdoor space and additional areas for solitude,” she said.
Demand is expected to remain resilient due to strong job creation, a “flood” of Housing Development Board (HDB) upgraders, and local and foreign investors looking for long-term rental income.
Moreover, Tan Tee Khoon, country manager of PropertyGuru Singapore, said the quarter’s largest driver of prices was in the suburbs or outside central region, as a result of the performance of executive condominiums.
“There is still a strong demand for affordable entry-level condos, likely fuelled by the market of HDB upgraders whose flats recently fulfilled their Minimum Occupation Period (MOP) in 2020 and 2021,” added Dr. Tan.
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 to mid-June.
“Past data have shown that the difference between the quarterly price changes indicated by the flash estimates and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution,” the URA said in its press statement.
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