_Singapore: Broad-based uptick in sales volume and prices in private residential market

Supported by positive economic performance, pent-up demand from both homebuyers and heightened collective sales activities, the private residential market fared well in 2017. Total transaction volume of private homes hit 25,010 for 2017.

Exhibit 1: Island-wide transaction volume

Source: URA, Knight Frank Research

Note: Data is obtained from the URA Quarterly Statistics Q4 2017. 

Leasing activities in Q4 2017 fared well in terms of value and volume of transactions on a y-o-y basis. The improved performance of the leasing market could be due to tenants taking advantage of declining rents in recent years, and landlords offering attractive prices at well-located areas.

Exhibit 2: Leasing Transaction Volume and Value, Island-wide

Source: REALIS, Knight Frank Research

Riding on the momentum of higher new sale transaction volume in 2017, we foresee new sale volume to range between 11,000 to 13,000 units in 2018, buoyed by returning interest from locals and foreigners and the debut of highly anticipated new project launches from March 2018 that will bring significant interest into the market.

Displaced residents from the numerous collective sales sites is likely to provide further boost to the private residential market from the second half of 2018, potentially propping up new sale and resale transactions. 

We project that island-wide private home prices will continue its rise in 2018, on the back of stable economic growth and anticipations of further price increases due to past-year record land bid prices. Non-landed prices in the RCR and OCR are poised to edge up as evident in positive sentiment arising from higher interest in the resale market and upcoming project launches in 2018.

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By Tan Tee Khoon and Tay Kah Poh