Private home prices continued their ascent in Q4 last year, climbing an estimated 7.3 per cent from the previous quarter. This sent prices for 2009 up 1.7 per cent from a year ago, defying bleak prognoses of double digit falls when the financial crisis unfolded.
Resale prices for public housing were also on their way up in Q4, rising 3.8 per cent from the previous quarter. Year-on-year, the index gained 8.1 per cent to hit a record high.
With economic skies clearing, property consultants expect to see further price increases across the property market this year. For private housing, more activity could also come from the prime segment.
‘More high-end projects, acquired through earlier collective sale activity, are expected to be launched in the first half of 2010,’ said CB Richard Ellis executive director Li Hiaw Ho.
Knight Frank managing director of residential services Peter Ow foresees demand returning to the high-end sector, particularly from investors in China and India.
The market outlook has improved sharply from the same time last year.
Then, market watchers worried about the economic downturn and credit crunch were predicting a 10 to 20 per cent drop in the official private home price index for 2009.
That could have materialised if not for an unexpected pick-up in mass-market home sales, which gradually spilled over to the mid to high-end sectors.
In Q3 last year, the benchmark index shot up by 15.8 per cent from the preceding quarter, reversing a year-long decline.
And according to flash estimates from the Urban Redevelopment Authority (URA) yesterday, the index continued to rise in Q4, but at a slower pace, gaining 7.3 per cent from Q3. This brought the index back to a point between Q3 and Q4 2007.
Prices of homes in the rest of central region (RCR) led the growth in Q4, increasing 9.5 per cent from a quarter ago. Prices in the core central region (CCR) and outside central region (OCR) rose 7.1 per cent and 5.8 per cent respectively.
‘The good response to selective high-end projects launched in the fourth quarter contributed to this upward surge in home prices,’ said Mr Li.
For instance, based on URA data for November, 87 units at Marina Bay Suites were sold at a median price of $2,159 psf and 61 units at Espada were taken up at a median price of $2,322 psf.
OCR home prices rose much less in Q4 compared with Q3, when they had jumped 16.1 per cent. Ngee Ann Polytechnic real estate lecturer Nicholas Mak suggested this was because developers launched fewer major suburban projects at relatively high prices.
For full-year 2009, the private home price index notched a 1.7 per cent gain, underpinned by a strong price increase of 11.2 per cent from the OCR region. Prices in RCR grew 3.1 per cent while those in CCR shrank 2 per cent. The index had lost 4.7 per cent in 2008.
Consultants are anticipating larger price increases as the economy recovers. CBRE’s Mr Li believes that residential sales will ‘move at a moderate pace’ this year – 8,000-10,000 new homes could be sold and prices could rise 5-10 per cent.
Knight Frank’s Mr Ow expects private home prices to post an average growth of 10 per cent this year, while Mr Mak foresees a 10-20 per cent increase.
As for the public housing market, the economic whirlwind last year did not stop prices from hiking. Going by HDB flash estimates for Q4, the resale price index reached 150.7 points, up 3.8 per cent from the previous quarter and 8.1 per cent from a year ago.
‘Average prices in the HDB resale flat market continue to gather strength,’ said Mr Mak, attributing this to strong demand from newly-formed families, permanent residents and home seekers who got priced out of the private home market as prices there rose.
Mr Mak believes that HDB resale prices will climb another 8-15 per cent this year, while Prop-Nex CEO Mohamed Ismail tips further growth at 5-8 per cent.
HDB said yesterday that it will offer 1,300 build-to-order (BTO) flats in Choa Chu Kang and Hougang for sale today.
The agency ‘will continue to launch more BTO projects in 2010 if there is sustained demand for new flats’.
Source: Business Times, 5 Jan 2010
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