Saturday, April 24, 2010

Private property prices continue to rise

Prices of Singapore’s private homes market defied recent property cooling measures and continued their upward climb in the first quarter of this year, even though the rate of growth has moderated slightly.

Statistics released by the Urban Redevelopment Authority (URA) on Friday show private residential properties prices rising to 175 points for the first quarter of this year, around 5.6 per cent higher than the previous quarter.

Analysts told MediaCorp that the whopping 7.4 per cent growth in private home prices in the fourth quarter of last year was “too high and unsustainable”.

“Although the price increase has dropped to 5.6 per cent this first quarter, it is still of the higher range”, said Mr Nicholas Mak, real-estate lecturer at Ngee Ann Polytechnic.

He said that if this trend continued, by year-end there could be a 22-per-cent jump in private home prices, reaching the peak level of 2008.

Real-estate agency ERA Asia Pacific said the market’s bullishness could be attributed to the opening of the two integrated resorts, as well as the Youth Olympic Games to be held in Singapore.

Singapore is becoming increasingly visible among international investors and high net worth individuals, said Mr Eugene Lim, associate director of ERA Asia Pacific.

According to the URA, prices of private homes on the city fringe during the first quarter rose the highest, by 7.9 per cent.

Prices of private homes located in the city climbed 4.4 per cent, while those in suburban areas rose 4.3 per cent. Rentals of private residential properties also increased 4.7 per cent.

URA statistics show a total of 4,372 uncompleted private residential units launched for sale by developers in the first quarter of the year – almost twice the 2,227 units released in the previous quarter.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, reckons that the increase in supply of private residential units may help temper prices further in the next quarter.

To lower inflation risks, Mr Tan said the healthy price growth for private homes should hover between 2 and 3 per cent every quarter.

In terms of sub-sales, the total number of such transactions was 806 in the first quarter, up from 771 in the previous quarter.

Sub-sales, or re-sales that occurred before the completion of a project, are usually used as an indicator of speculative activity.

Source: Today, 24 Apr 2010

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