SINGAPORE – Private home prices rose 3.5 per cent in the second quarter from the previous three months, fuelled by a sharp turnaround for apartments in the city fringe and the continued strength of the landed market.

The price rise was higher than the Urban Redevelopment Authority’s (URA) flash estimate of 3.2 per cent and a big jump from the 0.7 per cent gain in the first quarter. In the fourth quarter of 2021, prices rose 5 per cent, with the property cooling measures announced only on Dec 15.

Some analysts caution, though, that the price momentum may not be sustainable in the light of the rapid rise in interest rates and rising mortgage payments.

Data released by URA on Friday morning (July 22) showed that the 3.5 per cent increase was led by non-landed properties, whose prices surged 3.6 per cent compared with a 0.3 per cent drop in the prior quarter.

This was largely due to strong sales at Piccadilly Grand next to Farrer Park MRT station and LIV@MB in the Mountbatten area, which were launched at record prices for 99-year leasehold properties in their locales, analysts said.

Rising construction costs and land prices, coupled with low unsold inventory levels, have fuelled more optimistic pricing of new launches, they added.

As a result, prices in the city fringe jumped 6.4 per cent in the second quarter, compared with a 2.7 per cent drop in the previous quarter.

Prices in the suburbs grew 2.1 per cent, compared with a 2.2 per cent increase in the first quarter.

Those in the prime district rose 1.9 per cent, after a 0.1 per cent drop in the previous quarter, as more foreign buyers returned with the opening of Singapore’s borders.

Meanwhile, prices of landed properties grew 2.9 per cent, after chalking up gains of 4.2 per cent in the first quarter. During the second quarter, developers launched 1,956 uncompleted private homes (excluding executive condominiums or ECs) for sale, up from 613 units in the previous quarter.

They moved 2,397 private homes, 31 per cent higher than the 1,825 sold in the first quarter. In the second quarter, 616 EC units were launched and 193 were sold.

In the resale market, there were 4,236 resale transactions, up from 3,377 units transacted in the first quarter.

Meanwhile, the supply of new private homes remains tight, with 15,805 uncompleted unsold units and 1,701 unsold EC units at the end of the second quarter.

In total, around 30,700 units (including ECs) are expected to be completed in 2022 and 2023 – almost three times the 10,400 units completed in 2020 and 2021. This will help to cater to housing needs in the immediate term, URA said.