Last month’s buying frenzy at the Marina Bay Residences — which saw penthouses sold for a staggering $3,400 per square foot — has bumped up the growth of Singapore’s private-home prices to a seven-year high.
All in, private-home prices grew by 10 per cent last year — the highest since 1999.
But this is only for high-end homes, with the mass market remaining sluggish, cautioned analysts.
According to flash estimates released by the Urban Redevelopment Authority (URA) on wednesday, private home prices in the final quarter rose 3.7 per cent to 130 points, up from 125.4 points in the previous quarter.
This is the largest quarter-on-quarter increase seen in Singapore’s private-home prices since the second quarter of 1999, which registered an 11.4 per cent growth rate then.
But property analysts pointed out that the performance of URA’s private home price index is skewed by the boom in the ultra high-end segment.
In reality, mass market prices remain sluggish.
“The index grossly overstates the mass market and understates the high-end market. So, the public should not read too much into it, as it is not indicative of the performance of the rest of the market,” said Mr Colin Tan, research and consultancy director of property consultancy Chesterton International.
On Dec 14, Marina Bay Residences — a waterfront development that will face the downtown integrated resort (IR) — broke the national record with penthouses being sold from $2,700 psf to $3,400 psf. All 428 units were snapped up in two days, with prices averaging $1,850 psf. In a matter of days, units were put up for sale in the sub-sale market, with sellers demanding a 30- to 50-per-cent premium.
According to real-estate consultancy Colliers International, the average price of luxury apartments climbed by about 35 per cent for the whole of last year.
The company expects URA’s final figures for 2006 — which will be released in four weeks — to be even higher, as the transactions that took place in the last two weeks of last year are likely to be unaccounted for.
Going forward, analysts expect the high-end market to continue growing. Colliers expects the average price of luxury apartments to rise by 12 per cent to 18 per cent this year.
“We can expect speculators to continue to stir up prices and engineer similar scenarios based on expectations of what the IR can bring,” said Chesterton’s Mr Tan.
But this is likely to be accompanied by a broader-based recovery.
Analysts expect the private-home price index to grow between 7 per cent to 12 per cent this year.
To ride on the feel-good sentiment of the property market, developers are already lining up new projects to be launched this year.
Keppel Land yesterday unveiled the design for its plush waterfront condo, Reflections.
Designed by star architect Daniel Libeskind — who is designing the masterplan for New York’s Ground Zero site — the six glass towers offer panoramic views of Sentosa, the city and Mount Faber, while the 11 villa blocks are situated less than 150 metres from the Keppel Bay shoreline.
About 1,160 apartments will be offered once the project — Mr Libeskind’s first Asian residential project in Asia — launches in March or April.
No official prices have been set but estimates are in the ballpark of $1,500 to $2,000 psf.
Source: Channel NewsAsia, 04 January 2007