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SINGAPORE : Private residential property prices are expected to go up by between 5 and 8 percent next year.

That is according to property consultants at a seminar organised by the Real Estate Developers' Association of Singapore.

And they expect residential rental rates to rise by about 10%.

Property consultants are optimistic that the current pick-up in private residential property sector will continue into next year.

They are forecasting prices to climb higher in 2006, compared to this year's expected climb of between 3% and 5%.

Said Wallace Chu, Senior Manager of Research & Consultancy at Savills: "I think we will see a strong pickup in both internal demand and external foreign investments. The price will be in the range of 5% and 8% for the low to middle class. It will be higher for the luxury class, probably hitting the double digits."

Peter Ow, Executive Director (Residential) at Knight Frank shares the same views.

He said: "For next year, growth will be anywhere in the region of between 5% to 8%. The reason is the rental market has been firming up quite strongly. This will translate into better returns for property."

Market watchers say they expect to see growing demand from foreign investors.

Last year foreign investors from China and India account for some 10% of all sales.

Ow said: "It's in the region of 10% for both China and India. With the growth that we see happening in 2006, this should increase to between 12 to 13%."

Analysts say rental prices will go up by up to 10% especially in the prime residential districts.

As for the commercial sector, property consultants are expecting rental rates to rise for the rest of this year, especially for Grade A office buildings.

Said Agnes Tay, Director of Business Space with Knight Frank: "We are very positive about it and right now we are on the recovery. Looking at prime A office buildings, we see an increase of 5% over the next 6 months bringing the full year to about 10%."

Meantime, rental for retail outlets are seen rising moderately between 3% and 6%.

The biggest hike could be in the prime shopping belt of Orchard Road and the Marina-Raffles area.