Singapore home prices soar the most in eight years

A worker inside a public housing apartment under construction in Singapore. House prices in the city have rocketed. Roslan Rahman/AFP

Singapore private home prices surged the most since 2010 as the property market staged a recovery from a four-year slump.

An index tracking private residential prices jumped 3.1 per cent in the three months ended March 31, according to a flash estimate from the Urban Redevelopment Authority, building on a 0.8 per cent gain in the previous quarter. That is the biggest quarter-on-quarter gain since the three months ended June 2010.

Home prices have rebounded in the past three quarters, prompting aggressive land bids from developers as the property market shrugged off cooling measures ranging from additional taxes to limits on loans. The government in February raised taxes on home purchases exceeding S$1 million (Dh2.8m) as the collective apartment sales market reached levels described as exuberant by the central bank.

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"There’s no denial we’re entering an escalating market in light of higher land prices," said Desmond Sim, head of research for Singapore and South East Asia at CBRE, who had forecast a 5 to 6 per cent increase in home prices for 2018.

The price increase was driven by the so-called core central region, where housing values climbed 5 per cent in the area that includes prime residential districts. That is pushed by a handful of developments such as GuocoLand’s Martin Modern, according to the real estate brokerage and consulting company.

With 90 per cent of new residential properties sold in 2017 at below S$2m, that means home buyers may opt for smaller units to keep to their budgets as home values rise, he said. If the majority of transactions move up to S$2.5m, demand could ease, he added.