It beyond our control say Mah

Jan 2, 2008
S'pore private home prices up 31% in 2007 despite slower Q4 gain
Resale prices of HDB flats also rise by 17.4% for the year, in tandem with robust economy.
Strong economic performance and efforts to woo the cash of wealthy foreigners also helped to perk up the sector. -- PHOTO: PRESIDENT'S DESIGN AWARD Prices of Singapore's private homes rose by 31 per cent in 2007, while that for Housing Board resale flats went up by 17.4 per cent, as the property market rebounded after years of sluggish growth. But for the fourth quarter, prices of private residential property went up at a slower pace of 6.6 per cent compared with 8.3 per cent in the previous quarter, according to flash estimates of the price index for private residential property released by the Urban Redevelopment Authority (URA) on Wednesday. This pushes the price index to 170.5 points, the highest since the peak in 1996. Separate flash estimate released by Housing Board also on Wednesday showed that resale prices of HDB flats went up by 17.4 per cent for the year, in tandem with improved sentiments and economic growth. This is the highest jump since 1997. Only the peaks recorded in 1995 and 1996 exceeded the 2007 performance, said property agents. The fourth quarter HDB's Resale Price Index rose to 121.6 points, an increase of 5.6 per cent over the previous three months. VIDEO Many factors that affect property prices: Mah (0:45) 'A 5.6% increase from the previous quarter is commendable taking into consideration that the general market sentiment for the 4th quarter has dipped', said Mr Mohamed Ismail, CEO of property agency PropNex. 'This essentially means that property owners who have purchased properties in the last 10 years, with the exception of 1995 and 1996, have witnessed an appreciation in their property value,' he added. 'As a result of 2007 phenomenal performance, properties have become an asset to many HDB home owners rather than a liability. This is indeed good news for HDB home owners.' Mr Ismail expects the HDB property market to continue to enjoy a double digit growth in the 10 to 11 per cent range this year. The URA flash estimates showed that the increase in prices of non-landed private residential properties was higher in the suburban regions than the central prime areas. They went up by 7 per cent in the Core Central Region, 7.3 per cent in Rest of Central Region and 7.5 per cent in Outside Central Region in the last quarter. In comparison with the third quarter, prices of non-landed private residential properties rose by 8.3 per cent in the core central region, and 7.9 per cent respectively in the other two regions. The chief executive of property agency PropNex, Mr Mohamed Ismail noted that the price index for property in the core central region - at 190 points in the fourth quarter - has exceeded the 180 points reached in 1996, which means prices of private homes in this area are at an all-time high. While prices of residential property in the outer regions are still lagging behind the previous peak recorded in 1996, he said there is more room for growth for private homes in the outside cental region. He forecast for the private residential property sector for 2008: it will continue to perform well. 'However, the price increase will probably fall short of last?s incredible performance fuelled by foreign interest. Thus, the price index for 2008 is predicted to grow in the region of 15 to 18 per cent,' he added. The URA flash estimates are compiled based on transaction prices given in caveats lodged during the first 10 weeks of the quarter, supplemented by information on the number of new units sold. The statistics will be updated four weeks later when URA releases the full 4th quarter 2007 real estate statistics, when more data on the caveats lodged and the take-up of new projects are captured. On the supply side, the URA said there are about 65,400 private residential units in the pipeline, of which about 41,600 new private housing units are expected to be completed between 2008 and 2010. About 38,000 units of the supply in the pipeline (or 58 per cent) have not been sold by developers yet. This does not take into account new sites that will be made available for development through the Government Land Sales (GLS) programme. The HDB is also increasing the supply of new flats under the Build-to-order system and the release of Design, Build and Sell Scheme (DBSS). Both the URA and HDB said they will continue to monitor the market situation and property prices closely. Singapore's property sector saw record prices paid by developers for older condominium sites as they rushed to redevelop them into new units to meet robust demand during the year. Data showed prices are within sight of peaks reached in 1996, before a regional financial crisis struck and sent the sector into the doldrums. Singapore's property sector finally began to turn around after the government in 2005 gave approval for two multi-billion-dollar casino-entertainment complexes. Strong economic performance and efforts to woo the cash of wealthy foreigners also helped to perk up the sector. Also read Resale prices of HDB flats highest in 10 years