Residential property prices still rising in Singapore

Singapore residential prices still on the rise

Prices of private residential property in Singapore is rising faster in the second quarter of 2011 than it did in the first three months of the year, new research suggests.

Average resale prices of leasehold condominiums in suburban areas increased the most at 3.9% quarter on quarter, compared to 0.8% in the previous quarter, according to DTZ.

The average resale price of freehold condominiums in the prime districts of 9, 10 and 11 grew by 3.3% quarter on quarter compared to 0.4% in the first quarter, based on a basket of completed condominiums tracked by DTZ Research.

The average resale price of luxury condominiums rose the least at 1.7% but DTZ Research said it reflected an increase over the flat prices registered in the first quarter. This it said is the only segment with prices still below the 2007 peak.

According to Chua Chor Hoon, head of DTZ South East Asia Research, prices continue to trend upwards because sellers are benchmarking against the prices of new launches.

There is no let up in site. Singapore’s property market will be likely to experience a strong second quarter, with new home sales volume expected to hit 4,000 units, according to real estate consultancy CB Richard Ellis (CBRE).

CBRE said this would make it 11.3% higher than the 3,595 new homes sold in the first quarter and close to the 4,241 units sold in the fourth quarter of 2010.
However, there are signs that sales for new properties are down. Data from the Urban Redevelopment Authority shows a median price of about $1 million for new homes sold in the year to date, down from around $1.2 million in the first half of last year. The median size for units sold in the first two quarters was below 900 square feet, down some 300 square feet from the same period a year ago.

Joseph Tan, CBRE’s executive director for Residential, said one reason for this could be the awareness of rising costs and higher home prices, which may have prompted home buyers to go for smaller units.

Nevertheless, with the Government’s plan to release more Housing and Development Board (HDB) flats and land for private homes in the second half of this year, Tan said the take up of new homes in the third quarter would be likely to be lower than the numbers in the second.

Some of the new developments expected to be launched include Leedon Residence, Thomson Grand, two mass market projects located at Sengkang Square and Serangoon View as well as an executive condominium project on Segar Road.

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