ST : Private home prices to stay fairly flat

Oct 23, 2010
Private home prices to stay fairly flat

TWO months after the introduction of property market cooling measures, consultants are sure of one thing - Singapore private home prices are likely to be fairly flat until the end of the year.

The chief executive of consultancy PropNex, Mr Mohamed Ismail, expects the Urban Redevelopment Authority's price index to reach a plateau in the current fourth quarter, with another 2 per cent growth at most.

'(This is) simply because buyers are not coming in big numbers,' Mr Ismail told The Straits Times.

He said August's market cooling measures had weakened demand for mass market homes.

Buyers were becoming more price-sensitive, partially owing to tighter lending rules, he added.

Buyers are also carefully considering purchases given the restrictions on dual ownership, said director of research and advisory at Colliers International, Ms Tay Huey Ying.

'Buyers are really standing on the sidelines and watching,' Ms Tay said.

Another consultancy, Colliers, also expects the price index to increase by 2 per cent, at most, in the current quarter.

Consultants have differing views on the outlook for the popular mass market segment.

Mr Ismail expects prices of these homes to fall 5 per cent to 10 per cent in the first half of next year as developers respond to price-sensitive buyers.

However, Mr Ong Kah Seng, senior manager for Asia-Pacific research at Cushman & Wakefield, believes that prices are likely to remain flat.

'Buying interest will improve,' said Mr Ong, as buyers adjust to the measures by next year. However, better sentiment laced with some caution is likely to keep prices muted, he said.

Experts agree though that prices of high-end condominiums and landed properties will continue to rise, albeit at a slower pace.

High-end residential prices will rise 2 per cent to 3 per cent per quarter in the first half of next year, they believe.

HARSHA JETHNANI