ST : Analysts expect sober year for private property market

29 Jan 2011,
Analysts expect sober year for private property market
By Esther Teo

PRIVATE home prices may have moved up 17.6 per cent last year, eclipsing historical peaks and setting new highs across various segments in the process, but this year is expected to be far less exciting.

Analysts say price growth is expected to slow, and the volume of sales is set for a significant fall.

There was more evidence of this in new data released by the Urban Redevelopment Authority (URA) yesterday, which saw prices moderating across most segments as the property market continued to take a breather four months into the Government's Aug 30 property market cooling measures.

Fourth-quarter home prices gained 2.7 per cent, slightly down from the 2.9 per cent in the previous quarter and unchanged from flash estimates released earlier this month, the URA said.

However, certain segments - in particular, condominiums and detached homes - showed signs of defying gravity even after three rounds of cooling measures.

This may have contributed to the Government's decision to introduce another round of tougher-than-expected cooling measures two weeks ago, experts said.

Prices of detached homes continued their upward march with an 8.5 per cent jump in the fourth quarter - just eclipsing the already impressive 8.4 per cent gain in the quarter before. Detached home owners saw the value of their properties rise by a hefty 37.6 per cent last year alone - the most out of any segment.

Prices of landed homes in general, however, moderated to a 5.5 per cent rise, from 7.7 per cent in the third quarter.

This was owing to slower price gains in the semi-detached and terrace segments, with a 3.1 per cent and 3.7 per cent rise in prices respectively. This follows a buoyant 7.5 per cent and 7.2 per cent price growth in the quarter before.

An uptick was also noted in the non-landed home segment, which recorded a price rise of 1.8 per cent, up from a gain of 1.6 per cent in the quarter before.

URA data shows that price growth in this segment has been falling since the second quarter of last year.

Other indexes also suggested that non-landed home prices were creeping up again as buying interest returned to the market in the later months of last year, after buyers initially retreated when the Aug 30 measures were first introduced.

The National University of Singapore's Singapore Residential Price Index, which tracks only the prices of completed non-landed projects, posted a 0.9 per cent month-on-month rise last month - the first increase after two months.

Homes in non-central areas recorded an even larger gain of 2.2 per cent.

Ms Tay Huey Ying, Colliers International's director of research and advisory, noted that price gains of suburban homes also strengthened to 2.1 per cent, up from the initial estimate of 1.6 per cent.

'This indicates the continued uptrend in prices for transactions that have taken place in the last two weeks of the quarter, which probably is one of the triggers for the introduction of further cooling measures in January,' she added.

Robust sales were seen in suburban projects such as The Lakefront Residences in the Jurong Lake district, Waterview in Tampines Avenue 10 and The Tennery in Bukit Panjang in the fourth quarter.

Experts said, however, that despite impressive gains last year, this year will be a more sobering one for the market in the light of this month's measures, which caught many by surprise.

CBRE Research executive director Li Hiaw Ho said: 'Prices are likely to remain unchanged in view of this stand-off, but sales volume could fall in the short term. Selectively, new projects that are well-located and with good access will still see a good response.'