Gradually stabilising prices Private residential property prices continued their decline for the eleventh consecutive quarter. The price
decline decreased slightly by 0.1% in 2Q 2016. Overall for H1 2016, prices moderated by 0.6%. This is
less than the 1.9% in H1 2015. Prices decreased mainly in the Outside Central Region (OCR), where a
0.5% decline was registered. The Core Central Region (CCR) and Rest of Central Region (RCR) both
saw prices increases by 0.3% and 0.2% respectively.
As prices have been declining for a few years, buyers have been scouring the market for good buys and
this has contributed to some form of price support for centrally located properties in the CCR and RCR.
Buyers remain very price sensitive in today’s market and most of the transactions are concluded in the
$1million to $1.5million range.
Higher transaction volume Transaction volume increased by 59.2% in 2Q 2016. For H1 2016, there were 6,806 transactions, a
9.1% increase from the 6,239 transactions in H1 2015. Both the resale and new sale segments
experienced a boost in volume. This figure was boosted by successful project launches such as GEM
Residences and Sturdee Residences. Investor demand continues to be strong, with 1 and 2 bedroom
units being the most popular amongst buyers.
The resale market also experienced a surge in demand. Part of this might be due to developers
introducing new schemes for completed projects (which are considered “resale”), such as d’Leedon, The
Interlace and OUE Twin Peaks. These schemes have proven to be popular with buyers and has led to
an increase in take up for units.
Also, buyers continue to pick up value buys. For instance, a unit at Turquoise at Sentosa Cove was sold
on the resale market for $3.8 million, while the previous caveat indicated a transaction price of $7.2
million back in 2007. The difference in price is 47%. A unit at Paterson Suites was sold at $3.6 million on
17 June while the previous caveat was recorded at $6.46 million
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Figure 1: Quarter on quarter change in price indices of private residential properties
Period Overall Non-Landed Non-Landed Residential
CCR RCR OCR
2Q 2015 -0.8% -0.6% -0.6% -1.1%
3Q 2015 -1.5% -1.2% -1.6% -1.6%
4Q 2015 -0.2% -0.3% -0.4% 0%
1Q 2016 -0.6% 0.3% 0% -1.3%
2Q 2016 -0.1% 0.3% 0.2% -0.5% Source: URA, ERA Research
Figure 2: Transaction volume
Source: URA, ERA Research
Figure 3: Major new launches
Project Name Location Locality Units Launched Take Up Price Range (psf)
Sturdee Residences Beatty Road RCR 305 55.7% $1,410-$1,799
Stars of Kovan Upper Serangoon Road OCR 180 51.7% $1,225-$1,554
GEM Residences Lorong 5 Toa Payoh RCR 578 55.4% $1,262-$1,544
Source: URA, ERA Research
Sustained interest in luxury market In 2Q 2016, despite the lack of new project launches, new sales volume in the CCR was still promising.
162 units were sold by developers. Units sold were from a variety of projects, including Cairnhill Nine,
which was recently launched in 1Q 2016, Sophia Hills and Gramercy Park. Median prices trended slightly
downwards, to $2,343 per square foot for 2Q 2016 from $2,392 per square foot in 1Q 2016.
The prime resale market was more active in comparison. There were 555 units transacted at a median
price of $1,817 per square foot. However, much of this figure was contributed to by sales of delicensed
projects by developers. OUE Twin Peaks and Ardmore Three were two of the projects which were most
popular among buyers. There were 117 and 35 caveats lodged for the two projects respectively in 2Q
2016. The units were sold at a median of $2,579 per square foot for OUE Twin Peaks and $3,177 per
square foot for Ardmore Three before discounts.
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We can see that buyer interest is still very much alive in the luxury market. At prices above $2,000 per
square foot, there are still takers for the units. In addition, buyers of luxury properties fall in to two distinct
groups. The first group is the investors, who mainly purchase smaller units and rent them out. The other
group consists of owner occupiers who generally buy larger units, upwards of 2000 square feet.
Figure 4: New sales data in the CCR
Source: URA, ERA Research
Figure 5: Secondary sales in the CCR
Source: URA, ERA Research
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Buyers active in city fringe areas In the RCR, two new projects were launched in the second quarter of the year, Sturdee Residences and
GEM Residences. Both performed relatively well, selling out 41% and 54% of their total units respectively.
Small units made up the bulk of the transactions, with the one and two bedders being the most popular
among buyers. Both projects had unique selling points which set them apart from their competition.
Sturdee Residences is located within walking distance of Farrer Park MRT station, and hence offers
buyers a city living experience. GEM Residences offered residents a club like lifestyle with 24 hour
concierge service which is usually only found in high end condominium projects.
Besides new launches, buyers also picked up units in previously launched projects. Reasonably priced
projects which are located near MRT stations continue to be favoured by buyers, with projects such as
The Poiz Residences, being consistently among the best-selling. This shows that there is sustained
demand for existing projects; and buyers are discerning; going for projects which offer them the best
value for their money. Due to these factors, new sales in the RCR in 2Q 2016 reached 1,031 units, with
a median price of $1,486 per square foot.
On the resale front, activity was also present. 573 sellers found buyers at a median price of $1,227 per
square foot. These buyers are likely purchasing for own stay and hence have turned to the resale
market to make their purchases as the units offer more generous living spaces and can be occupied
relatively faster.
Figure 6: New sales data in the RCR
Source: URA, ERA Research
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Figure 7: Secondary sales in the RCR
Source: URA, ERA Research
Suburban properties still popular Despite there being only one new launch (Stars of Kovan) in the quarter, transaction volume in the OCR
was rather optimistic, with there being 1,034 new units sold and 825 resale cases. Existing projects
formed the bulk of the new sales, with Stars of Kovan only managing to move 93 units out of a total of
395. Other projects which performed well include Kingsford Waterbay, Kingsford Hillviewpeak and The
Glades.
Due to the large number of properties on sale in the OCR, prices are still correcting. In 2Q 2016, it was the
only segment in which prices decreased, according to URA’s private property price index. Upgraders from
public housing will find suburban properties to be a compelling purchase.
Figure 6: New sales data in the OCR
Source: URA, ERA Research
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Figure 7: Secondary sales in the OCR
Source: URA, ERA Research
2016 expected to be similar to 2015 With economic headwinds and cooling measures still present, we do not expect a sudden rebound in
prices any time soon. With prices being more stable, we expect an overall price decrease for 2016 to be
2% to 2.5%, improving from the 3.7% price decline in 2015.
Buyer sentiment has been improving, as we see the number of transactions picking up on both the new
sales and resale fronts. Accordingly, going by H1 2016 numbers, total transaction volume should remain
comparable to 2015’s, at 14,000 to 16,000 units.
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