Published July 3, 2007

Several areas still buck trend of rising home prices

Home prices in north, west remained flat or dropped: Savills


(SINGAPORE) For property prices, this could be a tale of two cities. While housing prices in many parts of Singapore have shot up over the past two years, there are some places where they have only crept up, and others where they have even dropped.

While private home prices in general have climbed 27.9 per cent from the Q2 2005 to Q2 of this year, official estimates released yesterday showed, in some parts of the island the price increase has been marginal, or even negative.

Partly because of this, a range of units in projects across the island are still available for under $500 per square foot (psf).

Data from property firm Savills Singapore show that while prices for the rest of the island have climbed by as much as 40 per cent over the past 24 months - with home prices in the prime districts of 9, 10 and 11 climbing by over 50 per cent - housing prices in the north, north-east and west of the country have either remained flat, or dropped.

'Home prices in the north, north-east and west have dropped about 10 per cent on average over the past two years,' said Ku Swee Yong, director of marketing and business development at Savills Singapore.

Savills identified Districts 23, 25 and 27 - Bukit Batok, Choa Chu Kang, Hillview Avenue, Upper Bukit Timah, Admiralty, Woodlands, Sembawang and Yishun - as those that have seen price drops.

At Euphony Gardens at Jalan Mata Ayer, prices have dropped from $404 psf in the second quarter of 2005 to $362 psf in the second quarter of this year - a fall of 10.4 per cent. At Palm Gardens at Hong San Walk, the price has fallen by 4.6 per cent to $373 psf, from $391 psf two years ago. The supply of private homes in these areas still outstrips demand for them, Mr Ku said. 'Demand has not spilled over far enough from the core central region into these areas,' he said.

It is then not surprising that a whole lot of projects going for under $500 psf can be found in these districts.

The data from Savills show that there are 65 properties - 14 freehold, 35 with 99-year leases and 16 executive condominiums - where units have transacted at under $500 psf over the past few months. Nineteen of these 65 projects are in Districts 23, 25 or 27.

The relatively low going rates means that buying a private condo in these projects might even be cheaper than picking up a HDB flat in a popular area. Last month, a 1,240 sq ft HDB flat at Kim Tian Place went for $720,000 - setting a record for five-room flats.

'At less than $500 psf, a 1,200 sq ft unit will sell for less than $600,000,' said Mr Ku. 'There are a lot of private units that are not as expensive as top-tier HDB flats.'

Mr Ku however pointed out that the comparison does not hold true when comparing a private condo and a HDB flat located in the same area, when the price fetched by the condo will always be higher.

Over the past two years, prices in the core central region of Singapore - which includes Districts 9, 10, 11, Marina Bay and Sentosa - have climbed much faster than in the rest of the island.

The latest estimates by the Urban Redevelopment Authority put the increase of homes prices over the second quarter of this year at 7.6 per cent in the core central region, and a smaller 6.5 per cent in the 'outside central region' category.

As prices in the outlying areas of Singapore recover, property prices in Districts 23, 25 and 27 should see better growth, analysts said. And in line with this, the number of properties selling for under $500 psf can also be expected to drop.