Property sales end year quietly

roperty sales ended the final quarter of last year with a whimper rather than a bang as prices of private homes grew at a slower pace from the previous quarter.

According to preliminary data from the Urban Redevelopment Authority (URA), private residential property prices rose 7.3 per cent in Q4, but this is only about half of the 15.8-per-cent growth posted in Q3 last year. Overall, the property price index increased 1.7 per cent for the full year.

Even with the seemingly moderated Q4 growth rate, this translates to a rise of 18.3 per cent for the index in the second half of last year, a sharp rebound after a dip of 14.1 per cent in the first six months of the year, noted CBRE Research executive director Li Hiaw Ho.

“The good response to selective high-end projects launched in the fourth quarter contributed to this upward surge in home prices,” he added. These projects included Marina Bay Suites, Cyan at Bukit Timah and Parvis at Holland Hill.

Referring to the 7.3-per-cent increase in the price index, PropNex chief executive Mohamed Ismail said it is a sign of “sustainable growth”.

The slowdown in the pace of price increases was most noticeable in the suburban Outside Central Region (OCR) where home prices rose 5.8 per cent compared to 16.1 per cent posted in the third quarter

“This could be contributed by the drop in the number of new major suburban projects launched at relatively high prices,” said Ngee Ann Polytechnic lecturer Nicholas Mak.

CBRE’s Mr Li noted that prices of non-landed homes in OCR have increased by 11.2 per cent for the whole year, outperforming those in the Rest of Central Region and Core Central Region, which rose by only 3.1 and 2 per cent, respectively.

“This is not surprising because some of the mass market and city fringe 99-year leasehold projects have seen their prices cross the $1,000 per sq foot barrier because of their near-city location or if they are near an MRT station,” he added.

Another factor that could contribute to the slow down in price growth was the decline in the level of speculation, added Mr Mak. The proportion of subsales fell from 11 per cent of total transactions in third quarter last year to 10.7 per cent in the fourth quarter, based on current available data.

The Singapore Government introduced measures to curb speculation in the property market last September.

Property analysts say that even with the slowdown in the growth of property prices in the fourth quarter, the figure is not insignificant and indicates that there is still sufficient momentum in the market to push prices to higher levels this year.

“It is projected that by the before the end of 2010, the previous peak in private home prices achieved in mid-2008 could be surpassed,” said Mr Mak.

CBRE’s Mr Li said that more high-end projects, acquired through earlier collective sale activity, are expected to be launched in the first half of this year.

Source : Today – 5 Jan 2010

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