Singapore. Singapore's private home prices rose for the first time in four years in the third quarter, marking a possible turning point for the sector, with analysts expecting clearer signs of a property market recovery in 2018.
The private residential property index rose 0.5 percent to 137.3 in the third quarter, after easing 0.1 percent in the second quarter, the Urban Redevelopment Authority (URA) said.
The rise in private home prices marked the first quarter-on-quarter increase since the third quarter of 2013. That was when the private home price index rose to 154.6, a record high on URA data going back to 1975.
Analysts said a recent pick-up in private home sale transactions had suggested that the market was on the mend after four years in the doldrums.
Private home prices are likely to come in at least flat for the whole of 2017, before edging higher next year, they added.
"This is significant in that it marks the turning point and the end of the bear market," said Eli Lee, an analyst for OCBC Investment Research, adding that he expects private home prices to rise 3 to 8 percent in 2018.
The government's announcement in March of reductions in stamp duties that sellers are required to pay on residential properties, as well as an improvement in the domestic economy, have helped bolster market sentiment, Lee said.
Against this backdrop, transactions in the private residential market have been picking up. In August, private home sales had climbed to 1,241 units, more than doubling from the 468 units sold in August 2016.
"I am seeing more viewers. Compare now and six months back, the number of people coming to look at properties that are available on the market, be it through advertisements, appointments or through open house, has increased," said Jeff Foo, a real estate agent and the owner of Jeff Realty.
Buyers are looking for condominiums priced between S$1 million ($735,131.96) to S$2 million ($1.47 million), he said. Some of the demand is being driven by those who sold their homes in recent en bloc sales, he added.
Private home prices will probably rise by up to five percent in 2018, after coming in around flat for the whole of 2017, said Christine Li, research director at Cushman and Wakefield in Singapore.
"Prices will pick up from next year when developers launch a significant number of new homes with higher prices," Li said.
After hitting the record peak in the third quarter of 2013, private residential home prices fell for 15 consecutive quarters until the second quarter of this year.
Private home prices fell 11.6 percent over that span, with the market dampened by a series of property cooling measures implemented by the government.
Such property curbs had been introduced over the years, as private home prices climbed more than 60 percent from levels seen in the second quarter of 2009 to the record high set in the third quarter of 2013.