Singapore home prices rose to the highest in more than two years last quarter as the city-state forecasts a recovery from its worst recession since independence as Covid vaccinations are rolled out and restrictions eased.
Property values increased 2.1% in the three months ended Dec. 31, according to a preliminary estimate by the Urban Redevelopment Authority released Monday. That’s the biggest increase since the second quarter of 2018 when prices increased by 3.4%.
The gain marks the third consecutive quarter of growth, defying concerns home prices would decline amid lockdowns and border closures in the tourism and trade-dependent island. Instead, Singapore joins countries from Australia and New Zealand to the U.K. and the U.S. where property markets have surged during the pandemic, as record low-interest rates fuel demand.
Real estate values could rise further this year, as the government expects the economy to expand by 4% to 6%, rebounding from last year’s 5.8% contraction. The Southeast Asian nation has eased social distancing measures and started its vaccination program with health-care workers getting the first shots.
Buyer sentiment could pick up further on the back of Singapore’s vaccination roll-out, said Christine Sun, the head of research and consultancy at OrangeTee & Tie Pte.
(Updates with analyst comments in the fifth paragraph. A previous version of this story was corrected to say prices rose the most since the second quarter of 2018)