Homebuyers snap up units from new property launches despite signals of low-interest rates, economic turnaround, and vaccine hope, resulting in a sharper-than-expected rise of 3.3 percent in the first quarter, surpassing the flash forecast of 2.9 percent.

This is the fourth straight quarterly price rise, and the first since the second quarter of 2018, when private residential prices increased by 3.4 percent until property curbs were implemented in July of that year.

The Urban Redevelopment Authority (URA) published data on Friday morning (April 23) showing that price inflation in the first quarter of this year was 3.3 percent, way above the flash forecast of 2.9 percent and higher than the 2.1 percent growth in the fourth quarter of last year.

Midtown Modern Pool
Analysts predict that if price inflation persists at this rate and tops the government’s estimate of 4% to 6% GDP growth, further cooling steps would be implemented. They predicted that the price index will begin to rise as more developments of higher per sq ft prices were launched.

Meanwhile, developer sales of new units increased by 34% to 3,493 units in the first quarter, except executive condominiums (ECs), from 2,603 units in the fourth quarter.

In the first quarter, resale amount increased to 4,519 items, up from 4,249 in the previous quarter.

 Read More: New Home Sales Double in March as Luxury Condos Pick Up Pace 

According to Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, foreign buyers seem to be returning to the Singapore property sector, with Chinese buyers being the most active.

Foreigners purchased 281 non-landed homes (excluding ECs) in the fourth quarter, up from 199 units in the previous quarter. This is still the largest number inked since 284 units were sold in the fourth quarter of 2019.

The number of non-landed homes purchased by permanent residents rose 28.2 percent quarter over quarter, from 872 in the fourth quarter to 1,118 in the first.

 Read More: Shun Tak Holdings Luxury Condo at Park Nova preview to start on 1st/May 

In the first quarter, mainland Chinese (non-PRs and PRs) bought 339 non-landed properties, led by Malaysian (198 units) and Indian buyers (170 units).

According to Ms Sun, more Americans are purchasing private homes in the United States, and they have surpassed Indonesians as the fourth-largest community of international buyers.

Americans purchased 58 non-landed homes in the first quarter of 2020, up from 45 in the fourth quarter and 40 in the first quarter. She also said that there were more Taiwanese and South Korean buyers.

Landed property values increased by 6.7 percent in the first quarter, outpacing the 2.5 percent rise for non-landed condominiums and rentals.

This compares to a 1.6 percent reduction in land home prices and a 3% rise in non-landed home prices in the fourth quarter of last year.

Non-landed property prices in the prime or core central area (CCR) rose just 0.5 percent in the first quarter, according to the URA, compared to 3.2 percent in the fourth quarter.

Non-landed assets in the city outskirts or remainder of central area (RCR) rates, on the other hand, increased by 6.1 percent, relative to 4.4 percent in the previous period.

Outside of the central area (OCR), prices increased by 1.1 percent, relative to 1.8 percent in the previous quarter.

In the first quarter, average private home rentals increased by 2.2 percent, relative to a 0.1 percent rise in the fourth quarter. Non-landed property rents increased by 2.4 percent in the first quarter, after falling by 0.1 percent the previous quarter.

Non-landed property rentals in the CCR and RCR increased by 2.9 percent and 2%, respectively, while non-landed property rents in the OCR increased by 2.1 percent.

In the first quarter, developers offered 3,716 unfinished private residential units (excluding ECs) for rent, up from 3,147 units in the previous quarter.

They delivered 647 EC units in the first quarter after launching 700 EC units for sale. They did not launch any EC units for sale in the fourth quarter, but they did sell 133 EC units.

There were 48,139 uncompleted private residential units (excluding ECs) in the backlog of zoning permits at the end of the first quarter, similar to 49,307 units the previous quarter.

As of the end of the first quarter, 21,602 units were unsold, relative to 24,296 units at the end of the previous quarter.