Thursday, January 3, 2013

Prices of suburban condo units climb 3.4% on strong demand

Straits Times
Jan 03, 2013

Robust demand for mass market flats drove private home prices to a fresh high in the last three months of 2012, despite the traditionally slow festive period.

Prices of suburban condo units climbed 3.4per cent in the fourth quarter from the preceding three months, according to flash estimates by the Urban Redevelopment Authority (URA) yesterday. This easily eclipsed the 1per cent rise in the third quarter.

Buyer demand for projects like eCO in Bedok, Foresque Residences near Chestnut Avenue and Kovan Regency was behind the surge in values, said Mr Ong Teck Hui, Jones Lang LaSalle's national director of Singapore research.

Demand for mass-market condos helped boost the URA's overall private property price index, which grew a stronger-than-expected 1.8 per cent in the fourth quarter, easily eclipsing the 0.6 per cent gain in the third quarter.

For the full year, overall prices were up a muted 2.8 per cent, less than the 5.9 per cent chalked up in 2011.

The overall price index is now up 59 per cent from when the market bottomed out in the second quarter of 2009 during the global financial crisis.

This indicates that residential market cooling measures imposed by the Government "have been effective to some extent", said Ms Chia Siew Chuin, director of research and advisory at Colliers International.

But Ms Chia cautioned that the environment of low interest rates and high liquidity is likely to persist, while volatility in financial markets could drive investors to seek refuge in property, increasing the risk of more government cooling measures.

The fourth quarter was the clear pace-setter last year, with prices in all market segments rising at their fastest pace in that three-month period.

City centre homes recorded a 0.8per cent price rise quarter- on-quarter, compared with the subdued 0.1 per cent increase in the third quarter.

Projects like V on Shenton, Leedon Residences and d'Leedon performed well in this district in the fourth quarter, said DWG senior manager Lee Sze Teck.

The narrowing price gap between suburban and city centre condos led some buyers to switch to the central region for better deals, analysts said.

City fringe property rose 0.9 per cent in the final quarter from the preceding three months, marginally higher than the 0.8 per cent year-on-year increase in July through September.
Analysts said prices are likely to increase further this year due to aggressive land bids from developers, but they expect the pace of growth to slow.

But the large supply of residential homes in the pipeline and buyers' reduced tolerance for sky-high prices will likely keep values in check, analysts said.

Mr Sam Goh, 25, who runs his own wealth coaching company Wisdom Capital, is hoping to buy a property in the Marine Parade area for investment purposes this year. Mr Goh, who lives with his parents in a five-room HDB flat in Tampines, will wait until the second half of the year, as he expects the local economy to weaken, leading to a dip in private property prices.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
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