Private home prices hit new high, growth pace slows

Private home prices hit another all-time high even as the rate of increase continued to moderate, suggesting that caution had crept into the market amid heightened uncertainty in the macro-economic environment and a large supply pipeline.

According to the Urban Redevelopment Authority (URA), the price index of private residential properties increased 1.3 per cent in the third quarter this year from the previous quarter to hit 205.7. Still, the rise was significantly lower than the 2-per-cent increase in the previous quarter and the URA said it was the eighth consecutive quarter in which the rate of price growth had moderated.

Ms Chia Siew Chuin, director of Research & Advisory at property consultancy Colliers International, said: “This is the first time since 4Q 2010 when the final full-quarter price index remains unchanged from the flash estimate. This could be reflective of a more cautious market sentiment.”

The URA said that as at the end of the third quarter, there were 76,255 uncompleted private homes from projects in the pipeline, higher than the 71,111 units at the end of the second quarter and the highest ever recorded.

A breakdown of the URA data showed that price growth in the city fringe and suburban areas outpaced that in the prime areas.

For the Rest of Central Region (RCR), prices increased 1.2 per cent, up slightly from 1.1 per cent in the previous quarter. In the Outside Central Region (OCR), prices rose 2.1 per cent, up from 1.7 per cent previously.

Prices of non-landed properties in Core Central Region (CCR) increased at a slower pace of 0.7 per cent compared to the 1.6 per cent in the previous quarter.

On the strength in OCR prices, Ms Chia said: “This is despite the grim global economic outlook and reflects demand from genuine home-buyers and longer-term investors as they remain confident about Singapore’s economic fundamentals amid a continued low interest rate and ample liquidity environment.”

Separately, the National University of Singapore yesterday released its Singapore Residential Price Index (SRPI) for September. The overall SRPI, which tracks prices of completed non-landed private homes, increased a marginal 0.1 per cent from the previous month after falling 0.2 per cent in August.

The SRPI Small, which tracks prices of homes under 506 sq ft, fell 1.9 per cent after rising 3 per cent in the previous month.

Source : Today – 29 Oct 2011

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