Singapore’s property rebound may not be sustained, Mah says

Demand in Singapore’s property market may not be sustained because of economic uncertainty and ample supply, National Development Minister Mah Bow Tan said.

The city-state is “monitoring the market closely” to ensure speculation in the property market doesn’t lead to a bubble forming, Mah told reporters today in Singapore.

“I think some of the practices and habits you saw in the last property boom are beginning to come back,” said Mah. “We will take whatever actions necessary to prevent such a situation from happening, but it is important for buyers themselves to be aware.”

Home sales jumped 9.1% in June from May to the highest since the Urban Redevelopment Authority began releasing the data. Still, home prices have fallen for a fourth straight quarter, with an index of private residential property prices dropping 4.7% last quarter, the authority said July 24.

“I would say that there is more than sufficient supply over the next couple of years, and I think it’s a bit too early to say whether there is a speculative bubble or property bubble building up,” Mah said.

Singapore developer Far East Organization has found buyers for 173 of the 278 units at its Waterfront Key development offered at an average price of $735 a square foot, the local press reported recently. Far East has also sold 57 of 80 units offered at its Silversea project since July 10, as well as 80% of the 182 units released at Vista Residences.

Wing Tai Holdings has sold 85% of the 120 units offered at its Ascentia Sky project in downtown Singapore at around $1,300 a square foot, it was reported.

Singapore’s gross domestic product expanded an annualised 20.4% in the three months ended June 30, the trade ministry said on July 14. That was better than the median estimate for a 13.4% gain in a Bloomberg survey of 12 economists.

Source : The Edge – 29 Jul 2009

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