The property market in Singapore has continued to defy expectations even as global economic prospects darkened, with prices for resale Housing and Development Board (HDB) flats as well as private homes hitting new highs in the third quarter.
According to preliminary estimates from the HDB yesterday, the resale price index increased by 3.8 per cent from the previous quarter, after rising 3.1 per cent in the second quarter and 1.6 per cent in the first.
The strong demand comes from singles, permanent residents, HDB upgraders and downgraders, as well as private property downgraders, according to real estate agency PropNex.
PropNex chief executive Mohamed Ismail said: “These buyers are genuinely in search of homes for their own occupation. However, due to the cooling measures in January this year, with the revised minimum occupation period of five years and the lower 60 per cent loan-to-value ratio, homeowners are reluctant to move or sell their flats, resulting in a supply crunch and driving median resale prices up. We expect the momentum to continue and prices to increase by 11 per cent for the year 2011.”
Mr Nicholas Mak, head of research at SLP International Property Consultants, noted that resale HDB flat prices are now 34.2 per cent above the previous peak at end-2008.
In November, the HDB will be launching 4,200 Build-to-Order (BTO) flats for sale in various towns, such as Bedok, Bukit Panjang, Hougang, Punggol and Yishun. It added that it was on track to deliver 25,000 BTO flats for the whole of this year. Another 25,000 BTO flats are expected to be launched next year.
UOB Kay Hian analyst Vikrant Pandey said: “It will take two to three years before we see larger supply coming on stream, so there’s some upward pressure on the HDB.”
In the private home market, prices continued to rise but the pace of growth slowed. According to the Urban Redevelopment Authority (URA), private home prices rose 1.3 per cent in the third quarter from the previous three months, the slowest pace since the rally started two years ago. Prices had risen 2 per cent in the previous quarter.
Despite this, property agency Colliers noted yesterday that private home prices have now reached an all-time high at 15.9 and 13.4 per cent above the 2Q 2008 and 2Q 1996 peaks, respectively.
The URA said the biggest increase was for homes outside the central region, which rose 2.1 per cent during the third quarter. Prices in the core central region edged up by 0.8 per cent.
Real estate agency Jones Lang LaSalle noted that demand for mass market properties “remains strong given the existing low interest rate environment”.
Source : Today – 4 Oct 2011