Increases in private home prices are expected to slow down in the second quarter after climbing 5.6 percent in the first quarter.
Colliers International said suburban homes could cost 2 to 3 percent more on average for the next two quarters.
Prices of suburban homes have already surpassed the peak by about 10 percent.
Meanwhile prices in the luxury segment have been projected to grow by up to 20 percent for the whole of 2010.
High-end homes are now just 8 percent off the record prices set in 2008.
And with the softening in price increases, analysts do not expect the government to roll out more measures to cool the property market.
Still, they believe high-end home prices could continue to push upwards, supported by foreign demand.
Properties in Sentosa Cove are among the priciest on the market. But many foreign buyers are still snapping them up, with a unit there being sold to a Chinese national for S$36 million.
With cooling measures implemented in several Asian cities, observers said more foreigners will dip into the Singapore property market.
Colliers International’s director (Research & Advisory), Tay Huey Ying, said: “Foreign buyers are certainly on the comeback. For the first five months alone, based on the caveats lodged, the number of foreign purchasers has already exceeded 55% of what we saw for the whole of last year.
“With the recovery of the economy gaining traction, we expect to see more of them coming into Singapore, especially given the cooling measures that the governments of Asian cities have put in place for their respective markets.
“We see some of those interest flowing into Singapore, and of course the appreciation of the renminbi will also contribute to the growing foreign buying population in the second half of the year.”
Property consultancy CB Richard Ellis estimates that some 4,000 new homes have been sold in the second quarter. That brings the first-half sales figure to 8,300 units, about 57 percent of new homes sold last year.
For the second half of 2010, market watchers expect 1,000 new units to change hands each month.
Despite the drop in sales volume, they said the strong numbers from the first five months of the year will ensure total sales for 2010 keep up with the transactions recorded in 2009.
Colliers International added that there will be fewer property launches as developers are running low on launch ready projects, especially in the mass market segment.
With signs of a slowdown in the property market, some analysts said that the government is unlikely to introduce more anti-speculative measures, unless prices rise sharply.
Chesterton Suntec International’s director and head for research and consultancy, Colin Tan, said: “It all depends on what’s the official price increase in the 2nd quarter. If it’s more than 5%, it’s likely that we may see more cooling measures….(one) of these measures could be lowering the
loan-to-value ratio from 80% to 75% or 70%.”
The Urban Redevelopment Authority (URA) is expected to release the data for Q2 on Thursday.
Source: Channel News Asia, 29 Jun 2010