The URA All Property Price Index increased by 1.3% QoQ, 2.1% YoY. The improved numbers over the flash estimates can be attributed to a price increase in the landed segment. The market is expected to see an increase of up to 3% for 2019.
The developer sales market went from strength to strength in 3Q 2019. In 3Q 2019, 3,281 units were sold, 39.6% higher than 2Q 2019’s sales volume. This is the highest volume in six years, an indication of the strength of the market.
A total of 11 projects were launched in 3Q 2019 – Dunearn 386, Haus on Handy, Jervois Treasures, One Pearl Bank, View at Kismis, Parc Clematis, Cuscaden Reserve, Meyer Mansion, The Antares, Uptown @ Farrer and Avenue South Residence.
The higher sales volume in 3Q 2019 is likely a result of flight to safety amidst the uncertainty.
The number of foreign buyers buying units in new launches jumped almost 80% in 3Q 2019. The stability of the country and currency are probably key reasons why foreigners chose to invest in Singapore. There is no noticeable uptick in the number of Hong Kong buyers in 3Q 2019.
There was also a sharp spike of more than 50% in the number of Singaporeans buying new launches as well. The allure of residential property providing stable and proven returns likely tipped the scales towards buying in times of uncertainty.
The top five best selling projects in 3Q 2019 were Parc Clematis, Avenue South Residence, The Florence Residences, Treasure at Tampines and One Pearl Bank.
Resale volume has stabilised at 2,378 transactions in 3Q 2019. The number of new launches continued to pull demand over from the resale market and resale volume is unlikely to recover to pre-cooling measures level.
Together with the 4,188 units sold in 1H 2019, almost 7,500 units are sold in the first nine months of 2019 which is much higher than the corresponding period in 2018. This puts the market on course to clock more than 9,000 units for 2019 and a slight chance of hitting 9,500 if the current sales momentum continues in 4Q 2019.
Upcoming projects in 4Q 2019 include The Iveria, Neu at Novena, Pullman Residences Newton, Midwood, Royalgreen, Dairy Farm Residences and Sengkang Grand Residences.
The HDB Resale Price Index inched up 0.1% in 3Q 2019. Our analysis of HDB caveats showed that the volume of younger flats (up to 20 years) is up by around 2% while the volume of older flats (more than 20 years) is down by around 2%. The average prices of younger flats continued to increase but those of older flats continued to be soft. The uptick may not be sustainable unless the average prices of older flats finds their bottom.
We are hopeful that the new EHG will encourage more buyers to look at resale flats and achieve a balance between BTO and resale market. If the resale flat prices bottom out and stage a recovery, it is positive for the private market because there will be more HDB upgraders.
For 2019, we feel that the price index will be down by up to 0.5% which is slightly better than 2018.