GOOD news rolled up on two fronts for the owners of private property yesterday - average prices are well up and rents have soared.
The strong sales and surging prices of posh developments ignited the market in the July-September period and drove overall prices up 2.7 per cent.
This is the biggest quarterly rise since 2000 and is well up on the 1.8-per-cent jump in the second quarter. It also confirms the recent upward trend.
Rents of private homes staged an even more spectacular recovery: Up 5 per cent in the quarter, more than double the 2.1 per cent rise in the April-June period.
'The data showed that market fundamentals are looking positive. Mass market prices should start to climb across the board in 2007,' said Mr Ku Swee Yong, a director at property consultancy Savills Singapore.
But the upswing in the private sector did not extend to Housing Board flats. Prices for the quarter dipped 0.2 per cent in this stubbornly lacklustre segment.
The figures - released by the Urban Redevelopment Authority (URA) - show prices for private property are now almost 12 per cent higher than the rock-bottom days of early 2004, but still 31 per cent below the mid-1990s peak.
While the overall average has been trending up by slightly below 2 per cent in the first two quarters of the year, the luxury apartment segment has been generating astonishing gains and is fast closing in on 1990s levels.
Prices rocketed 21 per cent in the first nine months of this year, far exceeding the 7 per cent growth chalked up for the whole of last year, said Ms Tay Huey Ying, director of research and consultancy at Colliers International.
The average price of luxury apartments was $1,760 psf in the third quarter, just a shade off 1997s peak of $1,778 psf, said Ms Tay.
Prices are forecast to climb by a further 5 per cent by the end of the year, and put on a further 10 to 15 per cent next year.
This will in turn drag up the overall price average. 'We expect the URA residential property price index to chalk up a further 2 to 3 per cent growth in the final quarter and 10 to 12 per cent in 2007,' said Ms Tay.
Private property rents, which had been on life-support for several years, are suddenly perking up and look in good health.
'Rentals have caught up with the previous peak in 2000 and will provide very good support for the continued price rise,' said Mr Ku.
Limited supply of prime, large rental homes - many of these are in properties earmarked for collective sales - could be partly behind the rental surge, said Mr Ku.
The 5 per cent rise in the September quarter should keep rental yields at about 3 per cent for freehold homes.
URA figures also point to a thriving office market, with vacancies falling from 12.3 per cent to 10.5 per cent, a level not seen since early 2001.
Supply is getting tighter, so rents will likely rise further over the next 12 months, said consultancy CB Richard Ellis.
But the HDB market has stayed trapped in the doldrums since anti-cashback measures kicked in from April last year.
But Mr Eugene Lim, ERA Singapores assistant vice-president, said: 'The third quarter decrease is very marginal... What is important is that we are continuing to see consistent and healthy resale volumes.'
joyceteo@sph.com.sg
Private homes
- Prices up 2.7%
- Rents up 5%
HDB flats
Prices down 0.2%
