Singapore Home-Price Growth Moderates Amid Apartment Glut

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Singapore home-price growth moderated last quarter amid slowing sales and a glut of apartments.

Private residential prices increased 0.9% in three months ended Sept. 30 versus a 1.5% rise in the second quarter, data from the Urban Redevelopment Authority released Tuesday showed. The so-called flash estimates will be updated on Oct. 25 once final data is available. There is generally little change between the two figures.

More than one year on from property curbs that immediately took the heat out of the housing market, prices have begun to rise again, albeit at a more modest pace. That’s against the backdrop of a supply glut -- Singapore has some 24,000 vacant units and another 44,000 in the pipeline, data released in June showed. The excess prompted the government to cut the supply of private residential units under its land sales program in the second half.

Home sales, meanwhile, are also slipping, down 4.8% in August. That’s coming off a peak in July that was the highest since November as a broader economic slowdown spurred investors to park their money in a market typically known as a safe haven.

“After two quarters of increases, prices seem to be resilient and headed for a stable trajectory,” Ong Teck Hui, senior director of research and consultancy at JLL, said. “Threats from the economic slowdown and oversupply remain, but downside to prices appears limited, unless a major crisis occurs.”

Singapore Home-Price Growth Moderates Amid Apartment Glut

In other highlights from Tuesday’s release:

  • Prices of non-landed private residential properties increased by 2.9% in Singapore’s prime and central regions, compared with a 2.3% increase the previous quarter. That shows the luxury end of the market is holding up -- Dyson Ltd. chairman and founder James Dyson set a new record for a penthouse in Singapore in July when he paid S$73.8 million ($53.3 million) for a residence spanning the top floors of the island’s tallest building
  • “The revival of the high-end market may be attributed to the keen interest to invest among wealthy buyers and the availability of attractive quality projects,” Ong said
  • Prices in the rest of the central region increased by 1.6%, after an increase of 3.5% the previous quarter
  • Outside of the prime areas to live, prices rose 0.7% versus a 0.4% bump in the second quarter
  • Ong said with Housing Development Board prices “on the mend,” it could provide further support for the private home market, especially from HDB upgraders. In Singapore, most people live in public housing HDB flats as opposed to private apartments

©2019 Bloomberg L.P.

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