PRIVATE home prices have just notched up their largest quarterly increase in six years, but Housing Board resale flat prices dipped unexpectedly.
Property industry players are baffled by this divergence of residential prices, but say that the dramatic and accelerating rise in private home prices appears set to continue.
Initial estimates from the Urban Redevelopment Authority show that private home prices rose 2.5per cent in the July to September period over the preceding three months - their biggest quarterly rise since 2000.
This climb has been fuelled by record prices at some of Singapore's poshest condominiums.
Private home prices have now risen for 10 straight quarters since 2004.
And it's all up and up. In the second quarter of this year, prices rose 1.8 per cent, while they were up 1.5 per cent in the first three months.
This takes the increase in private home prices to 5.8 per cent so far this year, more than the 3.8 per cent climb for the whole of last year.
More high-priced luxury projects are slated for launch over the next few months.
And that leads property consultants such as Mr Ku Swee Yong, residential director with Savills Singapore, to predict a further 2 to 3 per cent price increase by year-end.
Mr Joseph Tan, residential director at CB Richard Ellis, said the latest figures were a 'dramatic increase'.
He said this was driven by the sky-high prices at luxury developments such as St Regis Residences and The Tate Residences.
An analysis of third-quarter private home sales by Knight Frank showed that high-end home prices rose by 4 per cent but those of 'entry-level'' homes fell 1.3 per cent. But even as private home prices rose as a whole, resale prices for HDB flats fell 0.2per cent in the third quarter.
The drop caught industry watchers by surprise as HDB resale prices had been on a slow but steady climb over the last year.
Estimates of the number of HDB resale flats sold in the third quarter had also increased slightly, leading market watchers to expect a corresponding rise in prices.
Prices of resale flats had been rallying since the market fell sharply last year after measures were introduced to prevent home buyers from over-declaring their home prices to get bigger loans - the so-called 'cashback' scheme.
Resale flat prices climbed 1 per cent in the second quarter this year, higher than the 0.2 per cent in the preceding three months, and seemed set to continue the upward trend.
'The fall is very hard to explain,' said Mr Colin Tan, head of research and consultancy at Chesterton International.
Dennis Wee Properties director Chris Koh said his firm had sold about 20 per cent more flats in the third quarter compared to the previous one.
PropNex's chief executive Mohamed Ismail suggested that the fall in resale prices could be the result of competition from still-unsold new HDB flats.
And recent changes reducing the downpayment needed to buy private homes have made them more affordable, leading to more interest in private homes and possibly less demand for HDB resale flats, he said.
But all property agents and analysts agreed that the drop in resale prices was 'negligible' and would not affect the HDB market in general, which remains stable.
However, slow-moving HDB resale prices are likely to hurt sales for entry-level private homes, as these rely largely on demand from HDB dwellers upgrading to condominiums.
fiochan@sph.com.sg
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