Flash Estimates: Private home prices in Singapore fell by 1.1 per cent q-o-q in Q2 2020

    • The overall price index for private homes dropped by 1.1% in Q2 as compared to Q1 as per the latest flash estimates by Urban Redevelopment Authority. Year-on-year the index dropped by 0.3%.
    • Non-landed property prices dropped by 0.6 percent in Q2 following a drop of 1% in Q1 2020.
    • On a regional basis, non-landed property prices in Core Central Region (CCR) dropped by 0.1% in Q2 compared to 2.2% drop in Q1 while prices in Rest of Central Region (RCR) dropped by 1.9% in Q2 compared to 0.5% drop in Q1.
    • Prices in Outside Central Region (OCR) remain unaffected in Q2 compared to a 0.4% drop in Q1.
    • As per the estimates prices for landed homes dropped by 2.7% q-o-q in Q2 compared to a 0.9% drop in Q1.
    • Past data have shown that when the shift is small, the gap between the quarterly price changes suggested by the flash estimate and the actual price changes may be important. It is recommended that the public view the flash estimates with caution.
    • The property analysts attributed the “circuit breaker” partial lockdown to be the primary reason behind the drop in prices of private homes in Q2 2020.
    • There could be an increase in the demand of private homes by HDB upgraders owing to the stable HDB resale prices and the large number of HDB flats ready to be sold on the resale market in 2019 and 2020.
    • There could be a 3% to 6% drop in the overall private home price index for the complete year of 2020 predicts, ERA Realty’s head of research and consultancy, Mr. Nicholas Mak.
    • Research head Leonard Tay from Knight Frank Singapore reported that while developers will still be providing discounts to fuel home buying interest, which started in May, overall price declines would probably be moderate.
  • Consequently, in the second half of 2020, the volumes of transactions will increase with the gradual easing of restrictions and a degree of human interaction. Nevertheless, in view of recessionary pressure in all sectors of the economy, URA Property Price Index has the potential to fall by some 5% this year.

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