Private home prices in Singapore continued to recover in the fourth quarter of last year, growing 7.4 per cent on-quarter.
According to data from the Urban Redevelopment Authority, the rise is a slower pace from the 15.8 per cent jump in the previous three months.
But analysts expect the cost of homes to still creep up this year, and match the peak levels seen in the second quarter of 2008.
Mass market projects powered the private residential sector last year. Strong demand from those upgrading from public housing pushed prices up 11.8 per cent in 2009.
Market watchers said prices of mass market homes will still inch up this year at between 3 per cent and 5 per cent, despite having exceeded their peak prices.
But observers said suburban homes will likely play second fiddle to more expensive projects this year. And prices may match previous highs, given that the 7.4 per cent increase in the three months to December is just 6.6 per cent off the peak in second quarter of 2008.
Donald Han, managing director, Cushman & Wakefield, said: “This year, we are expecting prices to move as much as 10 per cent to 12 per cent, dominated primarily by the high-end as well as the luxury market.
“We would anticipate the first two quarters to go something like four to five per cent first, we would probably hit the top of the market, revisit that towards the third quarter of this year.”
Analysts expect six in 10 homes from the total stock this year to come from the mid- to high-end segments, where prices could rise 10 per cent to 20 per cent this year.
Developers may also launch fewer suburban homes after running down their inventory.
Tay Huey Ying, director, Research & Advisory, Colliers International, said: “If we are looking at the whole market including your secondary sales and your sub-sales, the total number of transactions is likely to hover around the 32,000 over units that we saw transacted in 2009. The bulk of the activity, we think will be led by secondary sales.”
For 2009, prices of new homes in the central area fell 1.8 per cent, while those in the city fringes rose 3 per cent. Overall, prices of private residential properties went up by 1.8 per cent in 2009.
After a bumper year in 2009, where over 14,700 homes were sold, market watchers expect sales to trend lower this year at between 9,000 and 12,000 units.
Source : Channel NewsAsia – 22 Jan 2010