Private home prices rise 16% in Q3 flash estimates

Singapore private property prices in the third quarter saw the steepest quarter-on-quarter increase since 1981.

The Urban Redevelopment Authority’s (URA) flash estimates showed private home prices rose 15.9 per cent in the third quarter – a sharp turnaround from the 4.7 per cent fall in the second quarter, and snapping four straight quarters of decline.

Overall, prices are back to where they were at the start of the year. And analysts said the data affirms the generally positive mood among buyers.

Brisk home sales in recent months, especially for units above S$2,000 per square foot, have seen overall prices recording their highest turnaround on record, since the data was first collected in 1975.

Analysts said it is mainly sentiment that is driving higher the demand and price increases.

Elaborating on the factors, Donald Han, managing director, Cushman & Wakefield, said: “In general, the feel good factor, the convergence of a few positive factors, particularly the stock market turnaround – we saw the green shoots come out from some economic indicators.

“Globally, we did not see any fallout of any major financial institutions. No bad news, is good news. Plus, on top of that, very low interest rates, conducive for bank borrowings.”

Homes in locations just outside the central region saw the highest price increase, at 19.1 per cent. Analysts said this is because most of the new launches were near major activity spots and train stations, which command price premiums.

In the core central region, prices went up 16.2 per cent, while prices climbed the least in the suburbs, up 15.4 per cent.

Going forward, analysts said price growth is unlikely to be sustained, in part because the full impact of government measures announced earlier this quarter will be felt in the fourth quarter.

Mr Han said: “If you’ve asked me the same question one, two months ago, I think the price increase of 15 per cent on a per quarter basis is unrealistic. To expect the momentum to go through 15 per cent, double-digit, I think that is not realistic as well because that is out of pace with economic growth.”

He noted that the global economy is only just beginning to pull itself out of a recession.

Meanwhile, public housing prices are also at a high. The Housing and Development Board’s Resale Price Index registered an all-time high in the third quarter.

According to flash estimates, the index is now at 144.7, which means resale flats cost nearly 45 per cent more than a decade ago.

Source : Channel NewsAsia – 1 Oct 2009

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