The increase in residential property prices, including condo costs, is expected to last until Q3 2020, a fresh Savills Research report revealed.
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Based on URA data, private dwelling costs climbed a second successive quarter in Q3 2019 by 1.3%, after 2.0percent in Q2. This increase is chiefly driven by recently launched projects, which buyers have been lately observed to gravitate towards at the cost of resale land according to this latest PropertyGuru quarterly report.
“Although studies have proven that the up-leg of the cost cycle will last 8.7 quarters, but by means of the global headwinds pushed by social and political worries, it may be better to err on the side of caution and pick a shorter time frame of 6 quarters as the base case,” the report composed.
Savills also advised that the present private residential market be abandoned”unperturbed” by government intervention despite the increasing costs and financial problems.
There’ll be the attendant negative spillover effects to another national sectors of the market. The chance of intervention may incite an unidentified market behaviour to emerge,” said the report.
More Than Half Of Sales Were For Smaller-Sized Components
The Savills report additionally noted that a sizeable set of private buyers place their money to smaller-sized units. Specifically, 34.8percent of units sold from the first nine months of 2019 were between 600 sq feet to 800 sq feet, while 27.6percent were out of 400 to 600 sq ft.
“We are visiting buyers proceed for compact components because of restricted capital,” said Tan Tee Khoon, Country Manager of PropertyGuru Singapore. “The tight funding also partly explains their taste for recently launched properties, as these typically have a lesser quantum cost than resale properties by virtue of being smaller in floor area, as well as a favourable payment program.”