Normanton Park Sales contribute to Singapore Private home prices increase in Q2 2021

Private home prices in Singapore continued to rise in the second quarter 2021, highly contributed by Normanton Park mega condominium sales, However, HDB resale values increased at a slower rate.

According to URA flash estimates, private home prices rose 0.9% in Q2 2021. This is a slower rate than the 3.3% increase recorded in the previous quarter. Private home prices rose 7.3% annually, and Normanton Park's 1862 units for sale has always been the main driving behind those numbers.

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Christine Sun, Senior Vice-President of Research and Analytics at OrangeTee noted that this is the fifth consecutive quarter of market growth.

Prices rose 1.8% quarter on quarter in Q2 2021, primarily due to non-landed properties in the Outside of Central Region (OCR). OCR has the lowest supply of homes and prices rose the fastest.

The 0.3% price increase for the Rest of Central Region was lower than the 6.1% growth recorded in Q1 2021. The Core Central Region (CCR), however, saw a 0.6% rise.

The 0.8% price growth in landed properties was slower than the 6.7% increase in the quarter before.

Mark Yip, CEO of Huttons Asia, stated that "after a strong rise in prices in Q1 2021 some landed home owner have raised their asking price, putting them out reach of some buyers. This has resulted in a pullback, and slower price gains, in Q2 2021."

Sun blamed the slow pace of price growth on fewer launches during Phase 2 of the Heightened Alert period, and lower supply due to delays in construction and labour crunch.

The lower prices caused a drop in the overall price index because resale properties accounted for a greater percentage of transactions. She added that caveat data from URA showed that 60.5% of both landed and unlanded homes were resale houses, which is higher than the 56.6% in this year's first quarter.

According to flash estimates by HDB, the HDB resale marketplace saw prices rise 2.8% in Q2 2021. This is lower than the 3% increase recorded in the previous quarter.

Yip said that the slower price rise could be due to lower volume and buyers' resistance to paying more cash over valuation (COV).

According to estimates, the Q2 2021 transaction volume will be 8% less than in the previous quarter.

"Almost all 26 cities saw lower transactions volume in Q2 2021, except for Bukit Merah and Choa Chu Kang," shared Yip.

He explained that the lower volume was due to restrictions on viewings during Phase 2 of Heightened Alert. However, there is still a lot of interest in resale flats despite delays in new homes being completed.

He said that total 106 HDB flats were sold for $1 million or more in the first half 2021, as compared to 82 transactions in 2018 and 64 in 2019.

Yip anticipates that there will be more than 200 million-dollar flat transactions this year.

He stated that while it might make headlines because of its transacted value, these transactions represent less than 1% overall transaction volume for the year.