Saturday, April 29, 2006
Largest increase in private home prices in six years
Rebound at top end yet to filter down to mass market in big way, say analysts
By Joyce Teo
Property Correspondent
PRIVATE home prices have posted their biggest quarterly increase since the first quarter of 2000, rising 1.5 per cent in the three months ended March 31 from the preceding quarter, boosted mainly by some sizzling sale prices for high-end homes.
Resale HDB flat prices, h owever, edged up a mere 0.2 per cent as they stabilised after last year's anti-cashback measures, which aimed to stop people from artificially inflating prices to get a bigger loan.
The Urban Redevelopment Authority's first-quarter home price index rose 1.8 points to 120, while the HDB resale price index rose 0.2 point to 101.8.
Private home rentals rose 1.1 per cent, up from 0.7 per cent in the previous quarter.
Property consultancy Knight Frank's managing director, Mr Tan Tiong Cheng, said the index shows that prices are going in the right direction. 'Certain pockets are enjoying a revival,' he said.
Besides high-end condos, landed homes did well too.
First-quarter landed home prices rose by 1.4 per cent, up from 0.9 per cent in the previous quarter, as the number of launches rose and buyers bought in anticipation of price increases, said Chesterton International head of research Colin Tan.
Still, the marked recovery in the high-end residential market has yet to filter down to the mass market in a big way, property consultants said.
'The general recovery is taking longer than expected as people are concerned about things like rising interest rates and the use of their CPF,' said one.
But there are signs that the recovery is filtering down, such as the strong take-up in the resale market, said Savills (Singapore) senior manager of research and consultancy Wallace Chu.
'Foreigners will still buy into the growth story of Singapore, especially with the result of the General Election and the announcement of the first integrated resort in Marina Bay. These will boost the overall sentiment for all sectors of the economy, which will filter down to the property sector,' he added.
Colliers International associate director of research & consultancy Tay Huey Ying noted that there are fewer unsold completed units, which implies that developers are under less pressure to reduce prices to clear stock.
Often, a project's unsold units are not the best ones, so developers may price them lower but that does not mean that the market has fallen, said Mr Tan.
That said, there is no lack of land and apartments.
Some developers have empty sites bought in the previous peaks in 1996 and 1999/2000 that they have yet to launch, said Mr Tan.
This year's property index could rise by 4 to 6 per cent, compared with the 3.9 per cent rise last year, said Mr Chu.
As for the HDB resale market, prices and sales volume are seen as staying relatively flat, said ERA Singapore assistant vice-president Eugene Lim.
Buyers have plenty of choices as the HDB continues to clear its unsold stock.
Thus, prices are unlikely to rise much, even as sentiment improves, he said.
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// posted by Shajahan @ 10:14 AM 