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Published April 29, 2006

Private home prices up 1.5% in first quarter
Resale HDB flat prices creep up 0.2%, official figures show


(SINGAPORE) Singapore's official private home price index edged up 1.5 per cent quarter on quarter in the first three months of this year. And in the public housing segment, the Housing & Development Board's (HDB) resale flat price index rose 0.2 per cent.

While some observers hailed the Q1 rise in the Urban Redevelopment Authority's (URA) private home price index as the biggest quarterly gain since Q1 2000, others expressed disappointment at the pace of increase.

They attributed this partly to a dearth of new high-end launches to add sparkle to the market, both in terms of benchmark pricing and sales volume on the back of strong demand from foreigners, as seen last year for the launches of The Sail @ Marina Bay and The Azure at Sentosa Cove.

Developers sold 1,858 private homes in Q1 this year - down 22.4 per cent from the preceding quarter but 49 per cent more than in the same period last year. Top-selling projects this time around included The Esta (323 units) and One Amber (98 units), next to each other at Amber Road.

They were also the two major property launches during the quarter, highlighting a point made by Knight Frank managing director Tan Tiong Cheng in explaining the relatively slow Q1 increase in the private residential property price index.

'These two projects launched in Q1, together with the existing Sea View in the same location launched last year, mean there's considerable supply in the area and a certain amount of cannibalisation of demand,' he said. 'Such a situation is unlikely to cause prices to shoot up.'

Mr Tan also pointed out that amid a dearth of high-profile launches, developers have been clearing remnant units in projects that are close to completion or have already been completed.

'Remnant units are typically not the best in the project and may have to be cleared at lower prices than the earlier, choicer units in the development. Hence, you don't see growth in prices,' he said. 'So the recovery in the property market is steady now, but not as euphoric as what we saw last year.'

Mr Tan, like other property veterans, reckoned: 'We need to see some high-profile launches like St Regis Residences and condos on Sentosa Cove that will draw out foreigners and create some sparkle again in the market.'

Developers launched 1,699 private housing units in Q1, down 17.7 per cent from the preceding quarter but 56 per cent higher than in the year-ago period.

While primary market or developer sales of private homes were lower in Q1, secondary market deals held steady at 2,333 units, up one per cent from Q4 2005.

Providing a further breakdown of secondary-market transactions, URA's figures show there were 95 sub-sale deals in Q1, down from 167 units in the preceding quarter, while the number of resale units rose 4.4 per cent to 2,238, from 2,144 in Q4 last year. Sub-sale deals are often seen as a gauge of speculative activity in the property market as they are resales that take place before a project's statutory completion.

Market watchers say part of the reason for the resale market being relatively strong - at more than 2,000 units in each of the past three quarters - is collective sales. Detached, semi-detached and terrace home prices posted quarter-on-quarter increases of 1.7 per cent, 2 per cent and 0.8 per cent in Q1 - all outpacing gains in Q4 last year.

Condo prices rose 1.5 per cent in Q1, again higher than the 1.1 per cent increase in Q4. But apartment prices rose only 1.6 per cent in Q1, slower than the 2.8 per cent gain in Q4.

URA's overall rental residential index rose 1.1 per cent in Q1, higher than a 0.7 per cent rise in Q4. The office rental index increased 2.3 per cent in Q1, slower than the 6.7 per cent rise in Q4. But shop rents rose at a faster 1.9 per cent in Q1, compared with a 0.6 per cent gain in Q4.

The latest URA data also shows that five residential projects received provisional permission in Q1. They include a CapitaLand-Lippo joint venture condo at Alexandra/Tiong Bahru roads comprising 406 units, and a 256-unit condo by Ho Bee on its Baywater Collection site at Sentosa Cove. Ho Bee also bagged provisional permission to develop 29 villas on Paradise Island at Sentosa Cove.

Sim Lian group received approval to build a 338-unit condo on the former Hin Seng Gardens site at West Coast Way, while Senfu Realty got the nod for an 18-unit strata housing development at Yuk Tong Avenue.