The Urban Redevelopment Authority (URA) today released the flash estimate of the private residential property price index (PPI) for 1st Quarter 2015, which has been computed using an improved methodology.
Revision of the PPI
URA’s private residential PPI reflects the broad price trends in Singapore's private residential market. Since the last revision to the PPI methodology in 2000, the private housing market has become more diverse. For instance, there is greater variation in the unit size and age of private housing developments. To ensure that the PPI remains robust, we have reviewed and improved the computation methodology.
The key changes to the PPI are as follows:
a. Improved methodology
Adopting the stratified hedonic regression method which can better control for variations in the attributes of transacted private properties such as age and unit size;
Switching from 12-quarter moving average weights to 5-quarter fixed weights;
Adopting a new base period of 1Q2009
b. More comprehensive coverage of transactions:
We have supplemented the existing data sources used to compute the PPI with stamp duty data from the Inland Revenue Authority of Singapore. With this, the improved PPI will capture all private housing transactions.
Please see Annex A for more details on the changes to the PPI methodology.
Flash estimate of 1st Quarter 2015 PPI
Using the revised methodology for the PPI, the overall private residential property index fell by 1.1%. This is the sixth continuous quarter of price decrease (see Annex B).
Prices of non-landed private residential properties declined in all market segments, as they did in the previous quarter. Price fell 0.6% in Core Central Region (CCR), 1.8% in Rest of Central Region (RCR), and 0.9% in Outside Central Region (OCR). Prices of landed properties fell 1.1%.
The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment, caveats lodged and survey data on new units sold by developers during the first ten weeks of the quarter. The statistics will be updated 4 weeks later when URA releases the full real estate statistics for 1st Quarter 2015, which captures more data from the caveats lodged, stamp duty records and the take-up of new projects. Past data have shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution.