It’s confirmed — condo prices in areas like Marina and Sentosa are outpacing their mass-market cousins in neighbourhoods like Woodlands.
Statistics from the Urban Redevelopment Authority, which for the first time is breaking down the prices of private homes by geography, show that there is a disparity of growth between the luxury and low-end markets.
Last year, non-landed property prices in the prime areas, also known as the core central region — defined as districts 9, 10, 11, Singapore’s downtown and Sentosa — increased by 17 per cent.
However, its lower-tiered peers at the rest of central region — such as Toa Payoh and Marine Parade — saw only a 3-per-cent jump in prices, while those outside of it, in areas such as Sembawang, had a 4.2-per-cent rise.
Properties in the core central region also dominated the fourth-quarter sub sale market, usually seen as a measure of speculative activity.
Of the 426 sub sales made during the last three months of last year, some 67 per cent came from the top-end market.
Overall private residential property prices for the whole of last year showed a 10.2-per-cent growth, compared with the 3.9-per-cent increase of 2005.
“The property price index clearly shows that the rise in the price of all types of residential property was led by the price growth in the newly-launched non-landed projects in the hotspot locations of the Orchard Road luxury belt, Marina Bay and Sentosa Cove,” said Ms Tay Huey Ying, director for research and consultancy, Colliers International.
The rental market for private homes also hit a 16-year record, with prices rising 14.1 per cent for the whole year.
This can be attributed to the diminished supply and increased demand caused by the year’s collective sales, said experts.
And the good news is that the property market will likely continue on its upward trend.
“The heat from Sentosa and Marina Bay will cool for a short while as investors re-focus on Orchard Road properties such as St Thomas Suites, the Beaufort on Nassim,” said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.
Ms Tay expects the price index to increase by 10 to 12 per cent for the coming year, with uncompleted non-landed properties in the core central region leading the way with a potential 15-to-20-per-cent rise.
However, other experts are taking a more conservative view.
“The market will exhibit steady growth but will remain sluggish outside of the core central region,” said Mrs Ong Choon Fah, executive director, regional head, consulting and research at DTZ Debenham Tie Leung.
In the public housing sector, the Housing and Development Board’s (HDB) resale price index for Q4 2006 climbed to 103.6 points, a 1-per-cent increase over the previous quarter. However, the total resale transaction volume for the year stood at 29,723 — some 4.3-per-cent less than the 31,056 resale transactions conducted in 2005.
The average valuation of resale HDB flats showed little growth in the final quarter, registering an increase of less than 1 per cent across the board. Three and four-room flats showed the largest increase, rising 0.5 and 0.6 per cent, respectively, to $165,300 and $234,800.
Unlike that of the luxury market in the private sector, experts project a rise of only 1 to 2 per cent in HDB resale prices.
“We are in a mature market and are likely to experience similar price increases throughout this year as the market is very much stabilised, with no significant factors causing prices to move significantly up or down,” said Mr Eugene Lim, assistant vice-president, ERA.
Source: Weekend Today, 27 January 2007