Watch that spike

By Christie Loh, TODAY | Posted: 03 July 2007 1203 hrs

It looks like an outright seller's market — even for those in non-prime districts.

Across the board, private home prices are quickening their surge towards the pre-crisis levels of 1996, according to official data released yesterday.

Worrying? Yes, for aspiring public housing upgraders who may be priced out of the suburban areas, say analysts. The Government doesn't seem to be resting easy, either.

Private home prices spiked 7.9 per cent in the second quarter, surpassing the first quarter's 4.8-per-cent increase at a pace not seen since late 1999, said the Urban Redevelopment Authority (URA), basing its data on caveats lodged for new units sold during the first 10 weeks of the quarter. It will release updated figures in four weeks.

The URA also took the unusual step of warning that "the Government will continue to monitor the market very closely", besides bolstering supply.

"Prospective homebuyers should take into consideration the sufficient pipeline of private housing, as well as the potential supply from Government Land Sale (GLS) sites, when deciding to make a property purchase," it said.

Private housing prices have been increasing at a faster pace because of economic prospects and the increasing attractiveness of Singapore as a global city, the URA added.

According to ERA Singapore's assistant vice-president Eugene Lim, the boom, which ignited in the downtown core, has "filtered outwards". Condominiums in the core central area — districts 9, 10 and 11, as well as downtown and Sentosa — rose 7.6 per cent in the second quarter. The rest of the central region — such as Upper Thomson Road and Alexandra Road — rose even faster at 7.9 per cent, while the remaining districts typified by mass-market condominiums registered a 6.5-per-cent rise.

Sales at new launches moved at a brisk pace as foreign funds and investors, confident of Singapore's growth as a regional financial centre, bought multiple units in several projects, said CB Richard Ellis Research's executive director Li Hiaw Ho.

But "another cause of the current frenzy in the market is the 'fear' among home buyers that they may lose out on good property buys," said ERA's Mr Lim.

"I'm worried it's becoming like a stock market," said Chesterton International's research director Colin Tan, who frets that Housing Development Board (HDB) upgraders are being increasingly priced out. The latest figures show that private residences outside the core region jumped at three times the pace of the first quarter's 2 per cent.

Mr Tan wants the Government to "stop monitoring and act fast" by issuing a warning that prices are getting out of hand.

A URA spokesperson told Today "the Government will ensure there is sufficient supply to meet demand. If necessary, the Government will make available more sites for private residential development through the GLS Programme next year."

URA has released sites "that can generate substantial new supply of private housing under the GLS programme for the second half of the year. There will also be 42,200 units expected to be completed from now till 2010", the spokesperson added.

Still, CBRE's Mr Li expects home prices to rise by 20 to 25 per cent for the whole of this year, after the first six months registered an increase of 13.1 per cent. This exceeds last year's growth of 17 per cent. TODAY/rose