Mass-market homes still best sellers in Q3

Prices up for new, non-landed units in suburbs; price rise slows in city centre

Published on Oct 02, 2012

By Esther Teo Property Reporter

MASS-MARKET homes remained the best-performing segment in the three months to September as robust new home sales kept pushing prices to record highs.

Prices of non-landed suburban homes rose 1 per cent in the third quarter, double the 0.5 per cent gain in the quarter before, according to a flash estimate released by the Urban Redevelopment Authority (URA) yesterday.

This is also twice the 0.5 per cent rise in third-quarter prices for the overall private housing market.

Prices of city fringe non-landed homes added 0.7 per cent compared with a 0.4 per cent gain in the previous quarter.

But the pace of price increases for city centre apartments slowed to 0.2 per cent from 0.6 per cent in the three months before.

Experts said that suburban homes are leading price growth with sustained demand from both Housing Board upgraders and investors.

They added that prices are being pushed up by new suburban projects such as Parc Centros in Punggol, with units snapped up at launch prices of $924 per sq ft (psf), and apartments at Parc Olympia in the Upper Changi area sold at $874 psf in August.

Mass-market homes made up an average of 75 per cent of new private homes sales in the first eight months of the year, URA data showed.

Resale prices are also performing strongly.

Mr Colin Tan, research head at Chesterton Suntec International, noted that unlike other segments which are still recovering, August's resale prices for suburban areas - excluding shoebox units - have pushed above their highs reached before cooling measures were introduced last December.

This can be observed from the Singapore Residential Price Index (SRPI) by the National University of Singapore, which tracks a basket of completed non-landed projects, he said.

International Property Advisor chief executive Ku Swee Yong said suburban home prices should remain resilient and rise gradually, underpinned by the confidence and continued price increases in the public housing sector.

Prices of resale HDB flats rose 2 per cent in the third quarter to a new high, helping to push suburban prices up 1 per cent, he said.

Late last month, another mega suburban project, eCO in Bedok South, was launched. Prices at eCO, which sold more than 220 units at its preview, were an average of $1,250 psf.

These sales were not reflected in URA's figures yesterday as the flash estimate does not take into account caveats lodged in the last four weeks of the quarter.

They might affect fourth-quarter figures instead as it takes a few weeks for caveats to be lodged.

Mr Ong Teck Hui, Jones Lang LaSalle's national director of Singapore research, added that prices in the suburban segment are likely to continue enjoying a "gentle upside" as buying interest remains.

CBRE added that some major upcoming suburban launches include 420-unit Skies Miltonia in Yishun and executive condominium projects such as 383-unit Waterbay in Punggol and 700- unit The Topiary in Sengkang.

Despite the higher prices, there has been a trend towards smaller- sized units to make the absolute sum still affordable for buyers.

Even though CBRE estimates the volume of transactions this year to hit a record of 21,000 units, the value of transactions is unlikely to be a record too.

The value of transactions is estimated to be about 10 per cent below the estimated $25.6 billion in 2010, when 16,292 units were sold, and 20 per cent below the estimated $29.5 billion seen in the 2007 peak, when 14,811 units were sold.

[email protected]