PRICES of private residential properties have crossed the peak reached in 1996 in the second quarter, according to flash estimates by the Urban Redevelopment Authority (URA).
The private-residential-property price index, based on URA estimates, rose from 175.0 points in Q1 to 184.1 points in Q2.
While this increase of 5.2 per cent is lower compared with the 5.6 per cent rise in the previous quarter, the preliminary estimate of the Q2 residential price index, at 184.1 points, is higher than the market peak of 181.4 points back in Q2 1996, said Mr Joseph Tan, executive director (residential) at CB Richard Ellis.
Prices rose the most, by 5.7 per cent in the quarter, among non-landed private residential properties in the Outside Central Region.
“This could be attributed to the price points set by new launches such as Tree House and The Minton, as well as rising prices of resale transactions in locations where several sites from the government land sales (GLS) programme had been sold in the past six to nine months,” said Mr Tan.
It was reported last month in The Business Times that May’s top seller was The Minton in Hougang, with 204 units sold at a median price of $849 psf. Tree House in Chestnut Avenue was one of April’s top sellers, at a median price of $835 psf.
What is your ambition? Aspiring towards a career in Comms & Media?
Successful tenders for three residential GLS sites awarded in May were bullish. For example, Keppel Land (Mayfair), the developer which won the site located in Boon Lay Way/Lakeside Drive, bid $499 psf per plot ratio, which could translate into a break-even price of $800-$850 psf, said Ngee Ann Polytechnic real-estate lecturer Nicholas Mak. That would outprice other condominiums in the same vicinity by as much as 40 per cent.
In the Core Central Region (CCR), properties in the same category rose by 5.1 per cent and, in the Rest of Central Region (RCR), by 4.5 per cent.
Back in Q1 2010, it was the price index for the RCR which showed the highest increase of 7.2 per cent, followed by 4.5 per cent in the CCR and 3.9 per cent in the OCR, noted Mr Tan.
Mr Mak expects that home prices will rise at a slower pace this year, at a year-on-year rate of 12 to 18 per cent.
“By the fourth quarter of 2010, the overall price level in the high-end CCR may finally surpass the peak price level that was last seen in Q1 2008,” he said.
In the long term, ample supply of residential land by the Government through its land sales programme will ensure a more stable supply, said Mr Tan.
“As sales momentum becomes less frenzied, home prices will stabilise,” he said. Earlier this year, to discourage short-term speculative investment in property, the Government imposed a 1 per cent to 3 per cent tax on residential properties sold within one year of purchase and lowered the loan-to-value limit on private housing loans to 80 per cent, from 90 per cent.
It also said it would release more residential-development sites, as well as build more Housing Board flats, to meet demand and curb rising prices.
The property peak of 1996 had been fomenting in 1994 and 1995, when home prices raced ahead of gross domestic product growth. However, the Government’s anti-speculative measures and the Asian financial crisis reversed the rise in prices.
Source: my paper, 2 Jul 2010
No comments:
Post a Comment