_A New Dawn for Singapore High-End Homes?
The winds of change have picked up for Singapore’s private residential market since the first half of 2017. After more than three years of continuing price declines over 15 quarters since the last peak in Q3 2013 in a post-TDSR era, overall private home prices in Singapore are showing gradual signs of bottoming out. Whilst the mass market segment in the Outside Central Region (or suburbs) showed moderating annual price declines, the Core Central Region (CCR, or city area) and Rest of Central Region (RCR, or city fringe) are still not fully out of the woods with stuttering annual price trends for non-landed homes amid the deluge of property cooling measures, moderated economic growth and cautious sentiment towards property investment in Singapore.
However, there are other market indicators that suggest that the high-end CCR segment could be turning the corner. Over the last four years, from Q2 2012 to Q2 2017, the unsold inventory of private residential units has been shaved noticeably by 57.0 per cent to 16,929 units. In particular, unsold inventory of non-landed homes in the CCR saw a significant reduction of 58 per cent since its last peak in Q2 2012 to total 5,461 units in Q2 2017, the lowest level since Q3 2016.
In terms of price and policy indicators, luxury homes in Singapore now possess a stronger value proposition compared to key gateway cities Hong Kong and London. Singapore’s dose of property cooling measures, from its first roll out in Q3 2009 and over eight rounds, is now less onerous compared to key rival city, Hong Kong. Singapore’s enduring strengths as a safe haven, given its transparent and efficient market, has sustained the appeal of high-end and ultra-luxury homes for local and foreign high-net-worth individuals.
Despite the latest recovery in private home prices by 0.5 per cent quarterly in Q3 2017 (URA flash estimates), it may be still early days for now to conclude if Singapore’s private residential market is slated for a sustained price recovery within a short term by end this year. Yet, there are upside factors to watch especially for the high-end segment over the medium to long term horizon. The limited new supply of high-end non-landed homes in the CCR, especially freehold tenures, as well as the prestige of a home address in the city are unique attributes to provide an uplift in investment prospects for high-end homes. With the rising tide of developer-induced fever in en-bloc sales and government land sales, the hunt for prized homes is likely to be even greater for the quarters to come.
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