Private home and average rental prices in Singapore declined for the sixth consecutive quarter according to a report by Knight Frank. Private home prices dipped by 3.8 percent while rental prices dropped 3.9 percent year-on-year.
There was a 5.7 percent drop in sale transaction volumes year-on-year for the third consecutive quarter across all markets in the country. Knight Frank pointed out that the decline was due to the Central Core Region (CCR) and the Executive Condominium (EC) market among other factors.
The CCR saw significant decreases in sales volume during the first quarter with only 375 units sold out of the 2,655 available in Singapore. That made for 49.1 percent decrease quarter-on-quarter.
There was a decline in sales of ECs during the first quarter. Knight Frank reported that total new sales declined by 70.7 percent quarter-on-quarter. Only one EC development, The Amore, launched in the quarter which was one reason for the decline. These figures are a significant improvement on the figures from Q1 2014. New sales volumes of EC units rose by 118.8 percent year-on-year.
Knight Frank predicts these factors along with a lack of desire to purchase will encourage developers to reduce prices on new developments in the city-state. Home prices could drop between three to four percent over the year as a whole, the company predicted.
The second quarter will see several projects in Singapore launch. Among these are Botanique at Bartley and North Park Residences. Sales volumes for the quarter are estimated to be between 2,200 and 2,400 which would be a marginal decline from the volume in Q1.
By the end of 2015, it is expected that 19,000 new units will be have entered the market. This will increase the overflow of supply in Singapore and that could have a profound effect on the property market. Knight Frank noted that landlords would need to adjust their prices to secure tenants for their vacancies. A rental decline of three to five percent is expected for 2015.
