July 6, 2007
Private housing prices 'may pass 1996 levels'
THE booming property market will drive prices for private housing above the 1996 peak by the middle of next year, according to an HSBC economist.
Senior Asian economist, Robert Prior-Wandesforde, said on Friday, 'The real estate market has probably further to run. We may be in some of the earliest stages of a bubble, but there is more for prices to go.'
'The private residential market is nowhere near that of mid-1996, so there is still room (for prices) to appreciate further even if we're in the early stages of a bubble.'
Mr Prior-Wandesforde believes that property prices will go higher partly because the ratio of home prices to income is only half that of 1996.
Wage growth is also running at multi-year highs and interest rates are low.
He also cited the speculative activity that is boosting prices.
And while prices in strict number terms may pass 1996 levels soon, once factors including wage levels are accounted for, the real catch-up will be some way off.
Read the full report in Saturday's edition of The Straits Times.