Private non-landed housing prices up 0.7% m-o-m in September: NUS SRPI flash estimate

The flash estimates for the overall Singapore Residential Price Index (SRPI) released by the National University of Singapore’s Institute of Real Estate and Urban Studies (IREUS) on October 30 indicated that prices of resale private non-landed residential properties in Singapore grew 0.7% m-o-m in September. This comes as overall consumer prices climbed 0.5% m-o-m in September, based on the Singapore Consumer Price Index.

The SRPI is a useful tool as it tracks and measures the price movements of a basket of 759 non-landed private residential projects completed between October 2003 and September 2021.

In September, the SRPI sub-index for the Central Region (excluding small units) grew by 0.8% m-o-m while the sub-index for the non-Central Region (excluding small units) increased by 0.6%. Furthermore, the sub-index for small units rose by 1.2% m-o-m in the month.

After adjusting for August’s figures, the overall SRPI for the month was revised to show a 1% m-o-m increase, which is higher than the 0.7% increase indicated by the flash estimates. The sub-index for the Central Region (excluding small units) was also revised to 0.9%, up marginally from the flash estimates of 0.8% m-o-m. As for the non-Central Region (excluding small units), the sub-index was revised to a 1% increase, higher than the original estimate of 0.7%. The sub-index for small units’ figure remained the same at 0.3%.

Lee Sze Teck, senior director of data analytics at Huttons Asia, believes that the slower price growth in the resale condo market is likely attributed to the higher-for-longer interest rates which is causing buyers to be more cautious with their spending.

IREUS’s report for the September SRPI also highlighted data on buyer profiles in the resale condo market. Singaporeans accounted for 74.6% of the total purchases on average in the last 12 months, followed by Singapore permanent residents at 21.4% and foreigners at 3.7%.

Interestingly, flash data for the month showed that non-landed private residential sales dropped 28% m-o-m in September while resale condo volume grew 2.5% m-o-m in August. Compared to the peak in March this year, the number of non-landed private homes purchased by Singaporeans, Singapore permanent residents and foreigners in the resale market fell by 37.4%, 46.2% and 86.7% respectively in September.

Additionally, the number of condo units purchased by foreigners in the resale market that month decreased by 56% to 8 units, down from 18 in the month prior.

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Based on this, Lee Sze Teck expects the high interest rate environment and ongoing economic uncertainties to persist which could lead to a further downward pressure on the resale condo market for the rest of 2021. He estimates that prices are likely to increase by at most 8% in 2023.