Singapore residential property sales is expected to remain moderate for the rest of the year, on the back of the growing mismatch of price expectations among buyers and sellers.
Sellers in the secondary market were placed under greater pressure to reduce their asking prices as the URA Private Property Price Index fell during the first quarter of 2019.
The decline in URA price indices was more reactive of the prices of completed homes transacted in the secondary market, given that prices of new projects were holding up during the first quarter.
In fact, the NUS Singapore Residential Price Index, which tracks prices of completed non-landed private homes and a proxy for the secondary market, eased 0.5 percent month-to-month after registering a 0.2 percent dip in January.
Moreover, secondary sale transactions fell to 1,623 units in Q1 2019 from 2,165 units in the previous quarter.
Although not all property transactions for Q1 2019 have been recorded, Knight Frank does not expect the secondary sale transaction volume to exceed the previous quarter’s record.
On the other hand, new sales declined more moderately than secondary sales, contracting by 7.4 percent quarter-on- quarter to 1,681 units in Q1 2019.
Nonetheless, Knight Frank expects the recently announced Draft Master Plan 2019 to encourage more sales within the areas that have been earmarked for future development.
“While buying sentiment is subdued by the recent cooling measures, the announcement of the Draft Master Plan 2019 is likely the bright spark to trigger more sales activity, especially in areas that will see prospective growth,” said Tan Tee Khoon, executive director & head of residential (project marketing) at Knight Frank.
“For instance, the plans for the Greater Southern Waterfront will offer much optimism in the future outlook of residential properties in the vicinity, and these properties will appeal to buyers with longer investment horizon,” he noted.