Singapore property stocks rise as private home prices hit a 5-year high

Singapore’s property counters celebrated on Monday, after government data showed the country’s private home prices hitting the highest reading in five years.

CDL shares up 1.69%, CapitaLand shares up 3.12%, and Frasers Property rose by 0.53%

At 3.25pm Singapore time, shares of the Republic’s property firms rose mostly, in a response to the positive private property data readings.

CapitaLand shares jumped 3.12%, or S$0.11, to S$3.64, while City Developments Limited (CDL) gained 1.69%, or S$0.16, to S$9.63. Frasers Property edged 0.53% or S$0.01 higher, at S$1.88.

Year-to-date, CapitaLand shares have risen by 18.6% while CDL shares have gained by 20%. Frasers Property is up by 15.3%.

Singapore private home prices on a five-year high

Private home prices in Singapore sprung to a five-year high in the second quarter of this year, with the Private Residential Property Index increasing by 1.3% to 150.5 points in the second quarter, from 148.6 points in the first quarter, flash estimates from the Urban Redevelopment Authority (URA) showed on Monday. The last time the index hit such a reading was in the first quarter of 2014.

The index had slipped in the previous two quarters in lieu of property curbs which hit the Republic earlier in July last year. In the first quarter, private home prices had fallen by 0.7%, and was down for the second straight month, following the 0.1% decline in the fourth quarter.

For the second quarter, the price increase was led by the rest of central region (RCR), or city fringes, which gained by 3.0% over the previous quarter. The core central region (CCR), or city centre, rose by 1.5% while the outside central region (OCR), or suburbs, was up by 0.5%.

Prices for landed properties edged up 0.2% from the previous quarter.

Buyers undeterred, say experts

The upturn for the second quarter was mainly due to higher value transactions of non-landed homes in the CCR and RCR, said Mr Ong Teck Hui, senior director of research and consultancy at JLL.

In spite of the cooling measures implemented last year, there is still firm demand for new high-end homes in the CCR as well as for attractive locations in the RCR, suggests Mr Ong. ‘(The cooling measures) do not seem to deter buyers who are keen on such properties,’ he commented.

Underlying demand is still very resilient despite the cooling measures, said Ms Christine Li, the head of Singapore and Southeast Asia research at Cushman and Wakefield.

Property demand could also have been boosted by owners looking for replacement homes after selling their apartments to property companies for redevelopment, Ms Li added.

In July last year, the Singapore government raised the Additional Buyer’s Stamp Duty (ABSD) rates and tightened the Loan-to-Value limits on residential property purchases.

Measures include leaving the current ABSD rates for Singapore citizens and Singapore permanent residents buying their first residential property at 0% and 5% but revising the ABSD rates for all other individuals by five percentage points, and 10 percentage points for entities.

The URA will release the final data on private home prices on July 26, 2019.