Prime resale condo prices hit new high

Prices of suburban units also rising at faster rate, says DTZ, but overall sentiment weaker

PRICE rises of private resale homes have generally slowed this quarter, to under 3 per cent in most areas, amid weaker buying sentiment.

However, prime homes hit a new price high, and price rises for suburban homes grew at a much faster rate, property consultancy DTZ said yesterday.

Suburban resale condominium and apartment prices leapt by 4 per cent for the quarter ending June 30, from the first quarter, to yet another new high.

DTZ was giving its resale price estimates ahead of official figures for the entire private home market due out next month.

It said resale prices of leasehold suburban homes climbed 4 per cent quarter-on-quarter to $648 per sq ft (psf), compared with the 2.1 per cent rise in the first quarter. The 2007 peak for these homes was at $615 psf.

DTZ said the reason suburban home prices on the resale market rose faster was a combination of higher new launch prices and aggressive bids for government land sales sites in suburban areas.

Otherwise, the rise in housing prices has generally slowed in the second quarter as resistance to high asking prices and stock market uncertainty caused many buyers to take a wait- and-see approach.

DTZ referred only to prices of non-landed homes in yesterday's report.

Price rises for resale freehold condo units in prime districts 9, 10 and 11 came in at a slower 2.6 per cent pace, down from 3.7 per cent in the first quarter .

But that still brought prices to a new high of $1,493 psf, which is 0.7 per cent higher than the previous 2007 record of $1,483 psf.

Meanwhile, prices of resale freehold condo units outside the prime districts rose 2.9 per cent to hit a previous 2007 peak of $747 psf, down from a 4.2 per cent rise in the first quarter, DTZ said.

Only prices for luxury condo apartments have yet to reach the previous peak. They are still 7.6 per cent off the 2007 record of $2,800 psf, despite rising 3.5 per cent to $2,588 psf.

Developers have been bidding aggressively for land but they are likely to 'tone down' their bids.

This is in view of an unprecedented number of suburban sites to be sold in the second half-year government land sales programme, said DTZ head of South-east Asia research Chua Chor Hoon.

'This will keep a check on prices of mass-market homes going forward,' she said.

Concurring, Frasers Centrepoint chief executive Lim Ee Seng said: 'In terms of affordability, I would say prices are stretching the limit.'

For the year, Ms Chua is forecasting a rise of up to 10 per cent for mass-market prices and about 10 per cent to 15 per cent for the other segments.

While the market has slowed since last month, the slower take-up rate for new developments is viewed as more sustainable, said Ms Margaret Thean, DTZ's executive director (residential).

She said developers plan to launch more new projects in the coming months. 'If they are well taken up, that would motivate more developers to launch other projects and stimulate buyer interest.'

The 361-unit Waterfront Gold in Bedok Reservoir has already been lined up for launch tomorrow. It will be the first major suburban launch this month.

Frasers Centrepoint said it will be selling units at the project at an average price of $950 psf. It plans to launch not more than a third of the project, just enough to finance part of the construction.

Source: Straits Times, 25 Jun 2010