Private home prices rise 0.7% in Q3

Analysts suggest the market is already bottoming out.

Prices of private residential properties rose by 0.7% in Q3. The rate is higher than the 0.1% decline in Q2, marking the first uptick in prices over the last four years.

According to the Urban Redevelopment Authority (URA), prices of landed properties rose by 1.2%, compared to the 0.3% decrease last quarter. Prices of private condominiums rose by 0.6%.

Prices of private condominiums in Core Central Region (CCR), Rest of Central Region (RCR), and Outside Central Region (OCR) all increased by 0.1%, 0.5%, and 0.8%, respectively.

Rentals of landed properties rose by 0.6%, whilst those of private condominiums fell by 0.1%.

Edmund Tie & Company (ET&Co) head of research Lee Nai Jia said the rise in prices suggests that the market has already bottomed out.

ERA Realty Network key executive officer Eugene Lim commented, "Buyers need not be overly worried that prices will see a robust spike; as the market recovery is expected to be gradual."

They are expecting prices to move sideways between the 0-1% price increase for 2017, lower than the 3.1% decline in 2016.

Meanwhile, ET&Co said the private residential market is likely to trend upwards unless there are external shocks or new shifts in policies that disrupt the market.

Developers launched 1,183 uncompleted private residential units for sale in Q3, lower than the 2,011 units launched in the previous quarter. Meanwhile, 2,663 units of these units were sold, lower than the 3,077 units sold in Q2.

The number of resale transactions rose from 3,698 units in Q2 to 3,949 units in Q3. That accounted for 59% of all sale transaction in Q3.

Meanwhile, the number of sub-sale transactions hit 81 units, lower than the recorded 130 units last quarter.

By the end of Q3, there was a total supply of 35,022 uncompleted private residential units in the pipeline with planning approvals, excluding executive condominiums (EC). Out of these, 16,031 units remained unsold.

URA is expecting 4,888 units, excluding ECs, to be completed in the next quarter and 7,893 more next year.

On the supply side, URA said there are about 16,700 units from Government Land Sales (GLS) sites and awarded en-bloc sale sites.

There are about 9,300 units from awarded en-bloc sites and another 7,400 units from GLS sites.

"The impact of supply tends to be lagged, and it should have marginal impact on prices in 2018. Separately, concerns over the large supply is substantiated if we assume our population continues to contract," Lee said.

However, he also said the influx of talent demanded by a recovering economy could help absorb the larger supply.