Private home prices expected to go down in Singapore. But what will be the rate of decline?

  • Private home prices are expected to go down heavily in the coming quarters. The drop in prices was only 1% in the first quarter but we will see a sharp downfall in the time to come as we witnessed huge price drops for expensive homes in Q1.

  • As per the latest data revealed by the Urban Redevelopment Authority (URA), the Central Core Region (CCR) was the most affected region with 2.2% fall in the prices of private homes in Q1. It was followed Rest of Central Region (RCR) with 0.5% downfall and Outside Central Region (OCR) with 0.4% downfall in prices of private homes respectively.
  • The current price drop has brought down the prices of private homes in CCR by 4.9% when compared to prices in Q3 2018 and down by 7.2% when compared by the all-time peak in Q1 2018.
  • The economists are now revising their forecast on the drop of the full year GDP within the range of 6-10% as the circuit breaker was extended to June 1 and the announcement of a huge global recession by the International Monetary fund.
  • The sales volume of private homes are expected to go down in the coming quarters as the showcasing events have been put on hold since the circuit breaker measures have been implemented.
  • The prices of the private homes will not decline sharply as the buyers and sellers are on the “wait and see” mode expecting benefits for themselves when the market opens after the restrictions are pulled off.
  • The drop of Private home prices in Q1 by 1% was the first drop after consecutive growth in the previous 3 quarters. The prices increased by 0.5% Q4 2019 while it was a 2.4% increase in prices year-on-year.
  • The all private residential price index is up by 1.6% when compared to the peak in Q3 2018 and 1.6% down when compared to the all-time peak in Q3 2013.
  • The prices of landed homes went down by 0.9% in Q1 2020 after a 3.6% increase in the Q4 2019 as per the data released by the URA. While the rent of the private homes increased by 1.1% in the first quarter of 2020 when compared to the plunge by 1% in Q4 2019.
  • Ms Tricia Song, Head of Research Singapore, Colliers International expects that the prices of private homes will not go down sharply as during the Great Financial Crisis owing to the property cooling measures applied over the period of 9 years by the Singapore government.
  • The government has also raised a helping hand by allowing the deferment of mortgages till the end of 2020 which should reduce the stress of the buyers and trigger increase in sales in the time to come.

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