‘Mild’ Drop of 1.1% in URA’s Private Home Price Index in Q2 2020
The Urban Redevelopment Authority's benchmark overall private home price index fell for the second consecutive quarter. It eased 1.1 per cent quarter-on-quarter (q-o-q) in Q2 2020 based on the flash estimate issued on Wednesday, after slipping 1.0 per cent in Q1 2020.
Suburban non-landed private home prices remained unchanged in the April to June period.
Property consultants generally said that a price decline in Q2 was to be expected, given the drop in transaction volumes during the circuit- breaker partial lockdown to contain the Covid-19 bug.
From April 7 to June 18, showflats were shut and property viewings disallowed.
All things considered - the severe setback in terms of disruption to business activity and movement of people during the circuit breaker - most consultants termed the drop in URA's benchmark index in Q2 as "mild" or "gentle".
Said PropNex chief executive Ismail Gafoor: "We think the 1.1 per cent price drop in Q2 was measured and reflected some resilience amid this pandemic."
Since the end of last year, the index has eased 2.1 per cent.
Property consultants' forecasts for the full-year drop in the index vary. At the lower end of the range is Mr Ismail of PropNex, who is projecting a fall of up to 3 per cent, "with the potential rebound in new homes sales lending support to prices in the second-half of the year".
For the whole of last year, URA's private home price index appreciated 2.7 per cent, a slower pace compared with the 7.9 per cent hike in 2018.
Looking ahead, ERA Realty's head of research and consultancy Nicholas Mak said: "The property market will be balancing opposing forces. There will be market forces that will depress property prices, such as economic headwinds and the weak job market.
"There will also be market forces that would support property prices, such as low interest rates, ample liquidity in the market, some pent-up demand, more active real estate marketing, foreigners seeking a safe haven outside their home countries and HDB upgraders' demand."
Mr Mak points out that HDB upgraders have helped to support demand for new suburban condo projects.
"The resumption of launches will place more units for sale on the market and pricing is expected to be more competitive to attract buyers," Mr Ong added. A notable upcoming launch of high interest in the OCR will The Ryse Residences, a mixed-use development next to Pasir Ris MRT.