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Thread: Private home prices surge 7.3 per cent

  1. #1
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    Default Private home prices surge 7.3 per cent

    Jan 5, 2010

    Private home prices surge 7.3 per cent

    Fourth quarter's rise brings increase for last year to 1.7%; mass market the star

    By Joyce Teo

    PRIVATE home prices shot up 7.3 per cent in the final three months of last year, allowing 2009 to finish in positive territory after a horror start.

    Yesterday's flash estimates indicated that prices overall increased by 1.7 per cent last year and it was all down to the final, frantic six months.

    The 7.3 per cent jump in the October to December period built on a stellar 15.8 per cent surge in the third quarter - the biggest quarterly rise in 28 years and one that ended 12 dismal months of price decline.

    'In a bad year, we still managed to show a 1.7 per cent rise in prices. There's certainly optimism in the Singapore property market,' said Cushman & Wakefield managing director Donald Han.

    That low overall figure is a stark reminder of how last year shaped up as a year of two halves, with dire results early on and a surge in the second six months.

    Mass market housing was the star segment with record levels reached.

    The Urban Redevelopment Authority (URA) data yesterday showed that non-landed home prices in the suburbs edged up 5.8 per cent in the fourth quarter. This is far lower than the 16.1 per cent climb in the third but it brought the full-year increase to 11.2 per cent.

    'If you want to go for deep discounts, you can't find them now in the mass market,' said Mr Han.

    HDB resale prices - up 8 per cent last year to a new high - are helping to support mass market prices, experts said.

    Prices of non-landed homes on the city fringes rose 9.5 per cent in the fourth quarter and were up 3.1 per cent overall for the year.

    But prices for non-landed city centre homes were down 2 per cent for 2009 although the 7.1 per cent increase for the fourth quarter points to a recovery.

    CBRE Research executive director Li Hiaw Ho said the good response to selective high-end projects launched in the fourth quarter, such as Marina Bay Suites, Cyan and Parvis, had fuelled the price rise.

    The robust estimates from the fourth quarter last year have boosted confidence for this year, among the experts at least.

    Ngee Ann Polytechnic lecturer Nicholas Mak said the 7.3 per cent rise, while smaller than the third quarter's, was still 'quite significant', indicating that there is still sufficient momentum in the market to push prices higher this year.

    The Shore Residences in Katong - launched on Jan 1 after a late December preview - did relatively well, selling 183 units out of 338 units that were released.

    Overall, experts believe that by the end of the year, prices may have surpassed the previous peak.

    Private home prices may rise by about 10 per cent to 12 per cent this year, with a slightly lower increase in the mass market segment and better upside in the high-end segment, experts forecast.

    CBRE Research tips a smaller overall rise of 5 to 10 per cent.

    PropNex chief executive Mohamed Ismail said prices will head up as more developers will be launching smaller units at higher prices on a per sq ft basis, especially from the second quarter.

    While rises are tipped from every quarter, most agree that prices will moderate this year.

    Much of the pent-up demand has been satisfied, said DTZ head of South-east Asia research Chua Chor Hoon.

    'There will be less panic or euphoric buying in view of the price 2009 and the possibility of more government measures if prices run ahead of economic fundamentals.

    'Affordability is a constraining factor in the mass market segment and any price increase in this segment will depend on the job market.'

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    Default Private home prices keep up momentum,00.html?

    Published January 5, 2010

    Private home prices keep up momentum

    They rose 7.3% in Q4, while HDB resale prices also continued to climb


    (SINGAPORE) Private home prices continued their ascent in Q4 last year, climbing an estimated 7.3 per cent from the previous quarter. This sent prices for 2009 up 1.7 per cent from a year ago, defying bleak prognoses of double digit falls when the financial crisis unfolded.

    Resale prices for public housing were also on their way up in Q4, rising 3.8 per cent from the previous quarter. Year-on-year, the index gained 8.1 per cent to hit a record high.

    With economic skies clearing, property consultants expect to see further price increases across the property market this year. For private housing, more activity could also come from the prime segment.

    'More high-end projects, acquired through earlier collective sale activity, are expected to be launched in the first half of 2010,' said CB Richard Ellis executive director Li Hiaw Ho.

    Knight Frank managing director of residential services Peter Ow foresees demand returning to the high-end sector, particularly from investors in China and India.

    The market outlook has improved sharply from the same time last year.

    Then, market watchers worried about the economic downturn and credit crunch were predicting a 10 to 20 per cent drop in the official private home price index for 2009.

    That could have materialised if not for an unexpected pick-up in mass-market home sales, which gradually spilled over to the mid to high-end sectors.

    In Q3 last year, the benchmark index shot up by 15.8 per cent from the preceding quarter, reversing a year-long decline.

    And according to flash estimates from the Urban Redevelopment Authority (URA) yesterday, the index continued to rise in Q4, but at a slower pace, gaining 7.3 per cent from Q3. This brought the index back to a point between Q3 and Q4 2007.

    Prices of homes in the rest of central region (RCR) led the growth in Q4, increasing 9.5 per cent from a quarter ago. Prices in the core central region (CCR) and outside central region (OCR) rose 7.1 per cent and 5.8 per cent respectively.

    'The good response to selective high-end projects launched in the fourth quarter contributed to this upward surge in home prices,' said Mr Li.

    For instance, based on URA data for November, 87 units at Marina Bay Suites were sold at a median price of $2,159 psf and 61 units at Espada were taken up at a median price of $2,322 psf.

    OCR home prices rose much less in Q4 compared with Q3, when they had jumped 16.1 per cent. Ngee Ann Polytechnic real estate lecturer Nicholas Mak suggested this was because developers launched fewer major suburban projects at relatively high prices.

    For full-year 2009, the private home price index notched a 1.7 per cent gain, underpinned by a strong price increase of 11.2 per cent from the OCR region. Prices in RCR grew 3.1 per cent while those in CCR shrank 2 per cent. The index had lost 4.7 per cent in 2008.

    Consultants are anticipating larger price increases as the economy recovers. CBRE's Mr Li believes that residential sales will 'move at a moderate pace' this year - 8,000-10,000 new homes could be sold and prices could rise 5-10 per cent.

    Knight Frank's Mr Ow expects private home prices to post an average growth of 10 per cent this year, while Mr Mak foresees a 10-20 per cent increase.

    As for the public housing market, the economic whirlwind last year did not stop prices from hiking. Going by HDB flash estimates for Q4, the resale price index reached 150.7 points, up 3.8 per cent from the previous quarter and 8.1 per cent from a year ago.

    'Average prices in the HDB resale flat market continue to gather strength,' said Mr Mak, attributing this to strong demand from newly-formed families, permanent residents and home seekers who got priced out of the private home market as prices there rose.

    Mr Mak believes that HDB resale prices will climb another 8-15 per cent this year, while Prop-Nex CEO Mohamed Ismail tips further growth at 5-8 per cent.

    HDB said yesterday that it will offer 1,300 build-to-order (BTO) flats in Choa Chu Kang and Hougang for sale today.

    The agency 'will continue to launch more BTO projects in 2010 if there is sustained demand for new flats'.

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    Private residential prices rise 1.7% in 2009

    By Wong Siew Ying, Channel NewsAsia | Posted: 04 January 2010 2253 hrs

    SINGAPORE: Private home prices rose 1.7 per cent overall in 2009, despite the recession, according to preliminary estimates by the Urban Redevelopment Authority.

    Prices of new homes in suburban areas outperformed the rest, rising at 11.2 per cent for the full year.

    However, market watchers said the demand and supply of these mass market homes are likely to ease this year. Their prices will also rise at a slower pace at between 3 per cent and 6 per cent.

    In contrast, high end homes are expected to fare better in 2010, with room for price increases.

    Analysts projected prices of luxury and mid-tier apartments to rise 20 per cent to 25 per cent in the next 12 months.

    - CNA/sc

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