ST : Report: S'pore home prices see fastest rise

Aug 28, 2010

Report: S'pore home prices see fastest rise

Experts sceptical as global data doesn't compare across same property types

By Joyce Teo

PRIVATE home prices in Singapore rose at the fastest pace in the world in the year to June 30, according to the latest quarterly report by online property research house Global Property Guide.

It says home prices here rose 34 per cent in that period - registering the highest year-on-year rise since 1995. This put the Republic well ahead of Hong Kong, in the No. 2 spot, with a 21.42 per cent jump. These figures have been adjusted for inflation.

Mr Matthew Montagu-Pollock, publisher of Global Property Guide, said: 'It's because of Singapore's amazing economic growth... Housing markets respond to economic growth because people have more money in their pockets. They respond to interest rates and they respond to momentum.'

Global Property Guide compiles the ranking using data from 36 countries and territories - mostly official data that can be based on a particular housing type or a combination of housing types. In Singapore, it uses Urban Redevelopment Authority data, which covers only private homes.

Industry sources were sceptical about the ranking, given that it does not compare the same property types, for instance.

'For the ranking to be useful, you have to compare like for like. In Singapore, you're talking about the top 20 per cent of the housing market whereas another country might not have public housing,' said an industry source, declining to be named.

'But it's possible that Singapore is among the top few when it comes to property price increases. It has strong growth fundamentals, the Government is stable, the property market is transparent and well-regulated and there's no capital gains tax. It also has an open policy to attract talent.'

Said real estate firm Jones Lang LaSalle's research head for South-east Asia, Dr Chua Yang Liang: 'Based on anecdotal evidence, Hong Kong property prices seemed to have exceeded those in Singapore in the first half of the year.'

Knight Frank has an annual prime international residential index, which tracks global luxury residential prices by city. Last year, it shows that Shanghai had the steepest rise of 52 per cent, followed by Beijing's 47 per cent and Hong Kong's 40.5 per cent. Singapore was fifth, up 17 per cent.

The Global Property Guide report shows that Ireland had the steepest price falls of those covered. The housing recovery in Europe is patchy while North America is recovering at a snail's pace and may see falling home sales.

The report said Asia's strong economic growth, low interest rates and rising foreign demand fuelled skyrocketing house prices in Singapore, Hong Kong, Taiwan and mainland China. And these governments have responded by implementing anti-bubble measures.

Mr Montagu-Pollock was downbeat overall. '...most markets are not worth buying right now. We think in general, it will last quite a long time. Both Singapore and Hong Kong are interesting. We keep saying don't buy in these (areas) because the gross rental yield is low. And the prices keep going up.'

He added: 'The world has got to push housing prices down. The great conundrum is how to push them down without pushing the economy down.' joyceteo@sph.com.sg