Private home prices remained firm in the second quarter, sending the residential property price index to a record high of 184.1 points.
Private residential prices increased by 5.2 percent quarter-on-quarter in the April-June period, according to flash estimates released by the Urban Redevelopment Authority (URA) on Thursday.
The figure beats the 3 percent rise forecast by some analysts. But market watchers do not expect further anti-speculative measures to be implemented by the government.
Sales-wise, industry figures showed that the number of caveats lodged in Q2 fell by 19.2% on-quarter to 7,041.
While sales volume moderated, prices continued to grow, albeit at a slower pace.
Private home prices were up 5.2 percent in Q2, after rising 5.6 percent in the first three months of this year.
The rise in Q2 pushed the residential property price index to an all-time high, surpassing the market peak (181.4 points) in Q2 of 1996.
Still, analysts said it is too early to call for additional cooling measures.
Liang Thow Ming, from Credo Real Estate, said: “Compared to 1996, I think we are a little bit above in terms of prices, especially in mass-market (homes). However in terms of income, I think we are also well above the 1996 level. So in that sense where affordability is concerned, it’s still pretty well-maintained. So I don’t think there is a bubble over here.”
In Q2, prices for mass-market homes (those outside the central region) showed the highest growth of 5.7 percent, partly due to price points set by new projects like Tree House and The Minton.
Consultancy firm CB Richard Ellis said another reason for the increase is the rising prices of resale transactions in locations where several sites from the government land sales programme had been sold in the past six to nine months.
Meanwhile, private homes in the city and prime districts (core central region) cost 5.1 percent more. And those in the city fringe (the rest of central region) saw price increases of 4.5 percent.
In comparison, for the first quarter of 2010, prices of non-landed private residential properties increased by 4.4 percent in the core central region, 7.9 percent in the rest of the central region and 4.3 percent in the outside central region.
Home prices are also expected to soften as the government rolls out more state land for tender in the second half.
Jones Lang LaSalle’s Head of Research (Southeast Asia), Dr Chua Yang Liang, said: “Prices are likely to remain stable or grow very moderately for the next few quarters. This is given that transaction volumes have come off in the earlier quarters and the few months that we’ve seen. And usually going by the long-term trend, as transaction volume comes down, prices will follow suit. In terms of the rate of increase, it will slow down or remain stable.”
Observers expect prices to grow by up to 3% for the next two quarters, bringing the full-year price increase to 20 percent.
Source: Channel News Asia, 1 Jul 2010