In a move that will address the dual directions that luxury and mass market private homes increasingly move in, the Urban Redevelopment Authority (URA) is set to introduce different price indices for various segments of the market.
As early as the end of this month, the URA could provide more information for its private property price index (PPPI) when it’s due to present the figures for the final quarter of 2006.
This move will quell claims that the PPPI is increasingly not reflective of the overall market, as recovery kicks in faster for the high-end private home segment than for its lower-end sibling.
Flash estimates for the PPPI at the end of 2006 revealed that prices had climbed 10 per cent year-on-year. But according to analysts, the high-end sector of the market has shown a 30 per cent year-on-year price increase, while the mass market has remained sluggish, with growth of as little as 3 per cent.
The official figure for the final quarter, they said, will be skewed by the buying frenzy at the luxurious Marina Bay Residences in the middle of December, where prices averaged $1,850psf.
“The index grossly overstates the mass market and understates the high-end market. So, the public should not read too much into it, as it is not indicative of the performance of the rest of the market,” Mr Colin Tan, the research and consultancy director at Chesterton International, earlier told Today.
But things are about to change.In an emailed statement, a URA spokesperson said: “URA intends to provide more detailed information about private residential properties when we release our quarterly data on Jan 26. This includes making public different price indices for different market segments of private residential property.
”The price index was last modified in March 2000.The impending arrival of more detailed property numbers have been well received by industry experts.
“Everyone will certainly benefit from more information, because we will see the components of this more sophisticated, more divergent property market,” said Mrs Ong Choon Fah, executive director, regional head of consulting and research at DTZ Debenham Tie Leung.
While the exact details of what information will be revealed to the public is still unknown, industry professionals have a list of information that they want to help make their jobs a lot easier.
These include information regarding the nationality of the buyers, specific details about the units involved, as well as when projects will be completed.
“With the informational support from the URA, market analysis would be better, and those in the market would be better equipped to make informed decisions,” said Mrs Ong.
However, Nicholas Mak, Knight Frank’s director of consultancy and research, said the interpretation of the numbers is just as important as the upcoming deluge of information.
“Information is a double-edged sword, it can either illuminate or it can blind people. The release of more detailed information will benefit the smaller players, most notably the man on the street, on the condition that he knows how to interpret the facts presented to him,” said Mr Mak.
Source: TODAY, 16 January 2007