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Thread: Sharpest rise in private home prices in 7 years

  1. #1
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    Default Sharpest rise in private home prices in 7 years

    Published April 3, 2007

    Sharpest rise in private home prices in 7 years

    URA flash estimates for Q1 show 4.6% gain

    By ARTHUR SIM


    (SINGAPORE) Housing prices have made their steepest climb in seven years - and there is no let-up in sight.

    According to flash estimates for the first three months of this year from the Urban Redevelopment Authority (URA), private home prices rose from 130.2 points in the fourth quarter of 2006 to 136.2 points in the first quarter of this year, an increase of 4.6 per cent.

    This represents the highest quarter-on-quarter increase since the 5.3 per cent seen in the final quarter of 1999.

    In line with URA's decision to release more detailed data on the residential market, it also published estimates for price indices for non-landed private residential property in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR).

    Its estimates show that the price index in the CCR increased by 5.6 per cent compared to 4.9 per cent in Q4 2006. The index rose 2.9 per cent for the RCR and 2.6 per cent for the OCR, compared with 2.2 per cent and 1.5 per cent in the previous quarter.

    CBRE Research executive director Li Hiaw Ho attributed the 'unprecedented high levels' of prices largely to sales of more luxury projects in the first quarter of the year.

    Based on CBRE Research's data, sales at new launches will likely exceed 3,500 units in the first quarter. Of these, Mr Li says that between 30-40 per cent could be in the CCR.

    Mr Li also highlights several hot spots outside the luxury market that are doing well including Farrer/Holland Road, Meyer/Amber Road and Buona Vista, where he believes new projects are being priced at 50 per cent more than what they would have fetched a year ago.

    Colliers International director for research and consultancy Tay Huey Ying reckons that the government's announcement of a potential population increase to 6.5 million has 'boosted market confidence in the RCR and OCR segments'. She concludes that: 'Such a sizeable population target would immediately put the brakes on any concerns over the current excess supply in the market.'

    The RCR and OCR segments are still likely to be driven largely by owner-occupiers rather than investors. 'The prospects of the leasing market in the CCR will continue to be brighter than those in the OCR for reasons of proximity to the CBD, shopping and entertainment facilities in Orchard Road and the upcoming integrated resorts,' she said.

    As such, the continued high level of collective sales will be an important factor in balancing supply and demand, and property prices.

    Savills Singapore director for marketing and business development Ku Swee Yong says that, by his calculations, there will be a net negative supply of some 500 homes this year, based on the 3,500 homes he believes will be lost to collective sales. The figure for net negative supply for 2008 is expected to be higher, he said.

    Although foreigners and investors are credited for supporting the luxury market, those 'displaced' by en bloc sales in the CCR could be stimulating other property segments. 'There are people who are panic buying because they have sold their existing homes through en bloc deals,' Mr Ku said, adding: 'If they are willing to downgrade, they should be OK.'

    The Housing and Development Board (HDB) resale price index has also increased by 1.2 per cent since the previous quarter from 103.6 to 104.8 points.

    Noting that it is the highest increase since the last peak in Q1 2005, PropNex CEO Mohamed Ismail said that choice flats are now being transacted at $5,000-$10,000 above valuation, unheard of just a year ago.

    PropNex's data show that demand was for bigger flats - five-room and executive flats. Mr Mohamed says the number of these larger units available is dwindling, and he expects the overall increase in the resale price index to hit 5 per cent for 2007.

    ERA Singapore assistant vice-president Eugene Lim also agrees that the 'momentum' in the HDB resale market is driven by larger flats, especially those in mature estates.

    In 2006, although overall volume of resale flats fell below 30,000 for the first time in a decade, ERA's data shows that executive flat resale volume of 2,229 units was 9.5 per cent higher than 2005. For five-room flats, the 6,421 units sold was 9.3 per cent higher than 2005.

    Mr Lim says that the relaxing of restrictions on subletting HDB flats has not yet had much impact on the public housing market, although he believes the current market is already 'tight'. 'Foreigners living here on a lower budget are finding it difficult to find HDB flats to rent,' he said.





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    Default Private home prices up; rise is biggest in 7 years

    April 3, 2007

    Private home prices up; rise is biggest in 7 years

    High-end condos lead charge, but others also grew at accelerated pace

    By Fiona Chan


    PRIVATE home prices have posted their biggest jump in seven years, bringing them close to their last peak in 2000.

    The good news is that the price growth is now more widespread, with homes outside the prime districts also seeing solid gains.

    Prices of all private homes rose 4.6 per cent between January and March this year, according to the latest official estimates from the Urban Redevelopment Authority. This is up from 3.8 per cent in the previous quarter.

    Prices have now been rising for three straight years, and are just 3 per cent shy of the 2000 peak.

    High-end condominiums in areas like Orchard Road and Sentosa still led the price rise, jumping 5.6 per cent.

    But the values of cheaper homes also grew at an accelerated pace.

    In city-fringe areas, prices of non-landed homes went up 2.9 per cent, while in suburban districts, they rose 2.6 per cent.

    As for public housing, HDB resale prices inched up 1.2 per cent, the most in 2 1/2 years.

    Property consultants expect home prices to keep strengthening throughout the year, but they are divided over how much prices will rise and why.

    Consultants such as Ms Tay Huey Ying, director of research and consultancy at Colliers International, believe the recovery has become more broad-based.

    Price gains in the booming high-end segment are now 'firmly filtering down to the lower tiers, including the mass market', she said.

    Ms Tay added that home buyers in all sectors have also become more confident after the Government indicated that Singapore's population may grow to 6.5 million.

    She expects broad-based growth to boost private home prices by 15 to 18 per cent for the whole year. They rose 10.2 per cent last year.

    However, other experts believe the price recovery remains confined mainly to the high-end sector.

    While homes outside the prime areas are doing better, it is mainly because of a few popular projects rather than a widespread spillover from the luxury segment, said Mr Li Hiaw Ho, executive director of CB Richard Ellis Research.

    Mr Li said only projects with good attributes in some locations like Meyer Road, Holland Road and Buona Vista are seeing 'significant' price rises.

    He is predicting a 10 to 15 per cent rise in prices for the whole year, led by high-end projects.

    In general, private home prices are expected to rise enough this year to surpass the 2000 high.

    The gap may be closed as soon as the middle of the year, said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

    'The whole market still has some way to go,' he noted, adding that prices are still 'roughly 25 per cent below the mother of all property peaks in 1996'.

    But while the outlook is strong for private homes, HDB resale flats are expected to lag.

    Mr Mohamed Ismail, chief executive of property agency PropNex, is predicting a 5 per cent rise in HDB resale prices for the year, while Mr Mak thinks it will be between 4 and 8 per cent.

    The slower growth in HDB resale prices means that HDB dwellers may not be able to sell their homes for enough money to make the jump to private property, said Mr Mak.

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  3. #3
    Madness
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    Smile Re: Sharpest rise in private home prices in 7 years

    Hopefully the sharpest fall does not come next year . My unit still needs some time to appriciate

  4. #4
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    Default Re: Sharpest rise in private home prices in 7 years

    Quote Originally Posted by Madness
    Hopefully the sharpest fall does not come next year . My unit still needs some time to appriciate

    Property cycle lasts 5 to 10 years.
    It will not be next year.
    You are going to have capital gain. Congrats!

  5. #5
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    Thumbs up Re: Sharpest rise in private home prices in 7 years

    I wouldn't be so hopeful , there was never a deferred payment on properties in SG during the last few booms , plus during those days many people where flushed with cash , now those within the buying age group are not so rich , with no permenent job status and a shaky economy .... I wouldn't look at 5-10 yrs , 2 years i will be very happy already .

  6. #6
    Teacher
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    Default Re: Sharpest rise in private home prices in 7 years

    Quote Originally Posted by Unregistered
    I wouldn't be so hopeful , there was never a deferred payment on properties in SG during the last few booms , plus during those days many people where flushed with cash , now those within the buying age group are not so rich , with no permenent job status and a shaky economy .... I wouldn't look at 5-10 yrs , 2 years i will be very happy already .

    Aiyoh! Then just make a return within 2 years lah.

  7. #7
    good time to get rich
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    Default Re: Sharpest rise in private home prices in 7 years

    Property, economy, stock market will be good all the way to 2010 when IR open. Why? becuz 2010 is election year mah.

  8. #8
    Snapper
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    Default Re: Sharpest rise in private home prices in 7 years

    Quote Originally Posted by good time to get rich
    Property, economy, stock market will be good all the way to 2010 when IR open. Why? becuz 2010 is election year mah.
    Thanks!
    On!

  9. #9
    Newbie hayata1972's Avatar
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    Default Re: Sharpest rise in private home prices in 7 years

    Hopefully things are as simple as what you say. My neck is also on the line.

  10. #10
    Joyce Teo (Ms)
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    Default Huge Jump In Homes Sold For Above S$5M

    Joyce Teo
    The Straits Time
    25 April 2007

    The number of home buyers paying more than S$5 million for a residential property in Singapore is skyrocketing, a new report has found.

    Property consultancy Savills Singapore said last year, 503 sales were done for homes costing more than S$5 million - an "astounding" 229.9% jump over 2005. About 60% of these high-end homes were bought by Singaporeans.

    And already in the first quarter of this year, the 157 deals made have surpassed the 153 total for all of 2005. Foreigners accounted for a growing proportion - 55% - of the buyers. In 2005, Singaporeans accounted for about 85% of these deals.

    The jump in buyers paying big prices corresponds, not surprisely, with a surge in the prices of high-end homes, particularly in the past 2 years.

    In the first quarter of this year, the average price of super luxury homes has shot up to S$2,747 psf, from less than S$2,400 psf in the fourth quarter.

    However, luxury homes in Singapore are still considered a bargain compared with other major gateway cities around the world, said Savills.

    In London, the world's most expensive city in the high-end market, the average price of high-end homes hovers around S$8,900 psf, it said.

    In New York, such homes cost about S$4,500 psf on average. And apartments in Roppongi Hills in Tokyo cost about S$3,400 psf on average.

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