Singapore home prices climb in third quarter despite virus restrictions

Singapore home prices rose in the third quarter, showing resilience despite persistent coronavirus restrictions that have disrupted the market.

Private property values climbed 1.1 per cent from the previous quarter, according to Urban Redevelopment Authority data on Friday. That’s higher than the flash estimate of 0.9 per cent and the second quarter’s 0.8 per cent growth.

While price gains have slowed from 3.3 per cent in the first quarter, they reflect the property market’s resilience despite Singapore’s start-stop measures to counter Covid-19 infections.

Like many other countries, the city-state has seen strong demand for homes during the health crisis, with buying from ultra-rich foreigners fuelling the trend.

“The property market will be ending the year on a higher note,” said Christine Sun, senior vice president of research and analytics at OrangeTee & Tie in Singapore. “Market sentiment may improve further as the global economy is expected to do better next year.”

Singapore is trying to live with the virus, but it’s reopening the country cautiously amid a surge in cases, with the daily tally surging past the 3,000 mark. It imposed a fresh round of curbs that were to end this month, but with infections showing no signs of abating, the government extended those restrictions until the end of November.

While home prices have grown, sales have declined for two straight months as the virus measures steered away buyers and deterred developers from launching new residential projects.

Prices for private homes for the full year may grow between 6 per cent and 8 per cent, said Nicholas Mak, the Singapore-based head of research and consultancy at APAC Realty unit ERA. That’s well above last year’s 2.2 per cent growth.

Buyers upgrading from public flats to private units remain a key source of demand, Mr Mak said. That’s because they’ll be looking for new homes as they cash in on the rising prices for public apartments, some of which have fetched at least S$1 million ($742,900).

With new launches expected next year in prime areas, the potential creation of vaccinated travel lanes with countries such as China and Indonesia, where wealthy buyers have long been attracted to the city-state’s luxury properties, will drive home sales and prices, he said.