Property Price Growth Slows Property
by Joanne Chan
SINGAPORE – Reaffirming earlier flash estimates, official housing figures unveiled on Friday showed that the growth of property prices slowed in the fourth quarter of last year.
Prices of public flats grew by 2.5 per cent in Q4 – down from 4-per-cent growth in the previous quarter – while private home prices rose 2.7 per cent in Q4, down from 2.9-per-cent growth in Q3.
In the HDB resale market, prices grew at a blistering 14.1 per cent last year. But there are signs that it is cooling: Transaction volume fell by 21 per cent to 6,454 in the fourth quarter, while the median cash-over-valuation (COV) dropped $7,000 to $23,000.
Moving forward, analysts expect property prices in general to stabilise this year, rising between 1 and 2 per cent each quarter.
SLP International director of research and consultancy Nicholas Mak said: “The fall in COV level is an indication that Government measures announced in August last year are starting to have an effect on the HDB resale market.”
This could be why the Government did not introduce any further measures for the HDB market in January this year, Mr Mak noted.
And according to real estate firm Propnex, the COV is still falling. Propnex’s January data so far showed that median COV was at $22,000.
For the whole year, market watchers expect resale flat prices to grow between 4 and 8 per cent – which they described as healthy given that it is in line with economic growth.
The HDB has said it will also be releasing up to 22,000 new flats this year, if there is demand.
In the private home sector, prices grew by 17.6 per cent last year, compared to 2009.
The prices of landed properties saw the biggest jump of 30.8 per cent while those of non-landed properties rose 14 per cent.
Dennis Wee Group director Chris Koh said: “Landed property have always had this premium edge … The Residential Property Act also prevents foreigners from buying landed properties. So citizens know that if you were to buy a landed property, you may be sitting on a gold mine.”
Some 8,500 new and resale private homes were sold in the fourth quarter, unusually high for a traditionally quiet period.
Analysts, including PropNex CEO Mohamed Ismail, said this may have prompted the latest round of cooling measures announced earlier this month.
While the measures were likely to remove speculative activity, analysts noted that there is still sufficient demand to cause prices to go up.
CBRE Research executive director Li Hiaw Ho said he expects private home prices to remain unchanged as sellers and developers take time to review the impact of the latest property measures. However, Mr Li said sales volume could fall in the short term, as short-term investors will no longer be participating in the market.
Source : TODAYonline – MediaCorp Press Ltd’s copyright
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