New private home price index launched in Singapore

There is a new price index to provide information on the state of the residential market in Singapore.

The index was developed by the National University of Singapore’s Institute of Real Estate Studies and is the first such index by an academic institution here.

The Singapore Residential Price Index, or SRPI, which tracks month-on-month price movements, will provide a resource for the development of property derivatives.

That will then help to expand the suite of financial products offered in Singapore.

Organisations like real estate firms and financial institutions can use the index to help them better manage their direct real estate exposure and to hedge their portfolio risks.

The index looks at factors like the unique location of each property and volume of transactions to consider the price movement of the market.

One unique feature of this new index is that it uses a fixed basket of properties to determine the data.

The basket comprises 364 private residential projects located across 26 postal districts in Singapore.

The composition of the basket will be adjusted bi-annually to reflect the changes in the completed stock of private non-landed residential properties.

The basket will be next revised in December 2011.

The NUS hopes its new index would complement the existing one by the Urban Redevelopment Authority that is released quarterly.

Source : Channel NewsAsia – 24 Mar 2010