Freehold condo units in districts 9, 10 and 11 fetching record prices
PRIME freehold condo units in districts 9, 10 and 11 are fetching record prices in the resale market - more than they went for during the last peak in the fourth quarter of 2007 - says a new report.
Property firm DTZ said yesterday that the average resale price of freehold non-landed homes in the three districts rose 2.6 per cent quarter on quarter to $1,493 per sq ft (psf) in Q2 this year. This is 0.7 per cent higher than the previous record of $1,483 psf in Q4 2007.
But resale prices of more upmarket homes - classified by DTZ as those that sell for more than $2,500 psf - are still 7.6 per cent below the Q4 2007 peak.
The average price of freehold luxury non-landed homes rose 3.5 per cent quarter on quarter in Q2 to $2,588 psf. In Q4 2007, they were selling for $2,800 psf.
Outside the prime districts, prices of freehold non-landed resale homes climbed 2.9 per cent to hit the previous peak of $747 psf last achieved in Q4 2007.
And resale prices of leasehold homes outside the prime districts - that is, suburban mass market homes - rose 4 per cent quarter on quarter to $648 psf.
While prices climbed in all the categories tracked, DTZ said that the rate of increase slowed in Q2 as resistance to high asking prices and uncertainty in the stock market hit buying interest in the property market. The only exception was in the mass market segment, where prices of resale leasehold condos rose more than they did in the previous quarter. The 4 per cent climb in Q2 was higher than the 2.1 per cent increase recorded in Q1.
The comparatively higher prices of new developments and aggressive bids for government sites in suburban areas have had a cumulative effect in raising the prices of homes in the secondary market, DTZ said.
But looking ahead, developers are likely to 'tone down' their land bids in view of the unprecedented high number of suburban sites due to be sold in the second-half 2010 government land sales programme, said DTZ's head of South-east Asia research Chua Chor Hoon. This will keep a check on the prices of mass market homes, she said.
Analysts are still most bullish on the freehold luxury market, as prices there are still significantly lower than during the 2007 peak.
Kim Eng Research analyst Wilson Liew said that China's recent move to allow the yuan to appreciate gradually may spur more purchases of Singapore properties by high net worth Chinese nationals as their purchasing power improves. He said that as an asset class, high-end properties in Singapore are still attractive.
Source: Business Times, 25 Jun 2010