S'pore’s private property prices climb 7.9% to near 10-year high

S'pore’s private property prices climb 7.9% to near 10-year high
- Jul 2, 2007

URA flash estimates confirm soaring trend of private home prices and it says more sites will be make available for private residential projects next year, if necessary, to meet demand.

Private-home prices in Singapore rose to the highest in almost 10 years in the second quarter, climbing 7.9 per cent in the second quarter of this year, says the Urban Redevelopment Authority today.

The price index of private residential property rose 7.9 per cent to 147.3 points in the three months to June 30 from the previous quarter, which went up by 4.8 per cent, according to the flash estimate released by URA. This the fastest pace in almost eight years and the highest level since the fourth quarter of 1997.

The index rose 9.8 per cent across Singapore for the whole of last year.

The advance estimates are compiled from transaction prices lodged during the first 10 weeks of the quarter, as well as data from new apartments that have been booked.

Singapore's economy is enjoying its longest expansion since 1994, allowing developers to sell apartments at record prices. SC Global Development Ltd. sold its "The Marq" apartments for as much as $5,100 a square foot at the end of June. Home prices in the city could rise as much as 25 percent this year, Citigroup Global Markets said last month.

The URA will release the official price index for the full Q2 in four weeks time when more data on the caveats lodged and take-up of new projects are captured.

"Past data has shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution," said the URA statement.

On the rising property market, URA said the increase in private housing prices in recent quarters "is in line with greater economic growth and rising confidence."

"Private housing prices are now increasing at a faster pace because of good economic prospects going forward and the increasing attractiveness of Singapore as a global city," it said.

"The government will continue to monitor the market very closely. It will ensure that there will be sufficient supply of residential space to meet demand."

Singapore's property sector recovery gained momentum after the government introduced measures in July 2005 to ease real-estate financing rules and foreign investment.

To increase demand, the government recently announced that 20 residential sites and five other commercial and residential and white sites would be released, adding a potential supply of about 8,000 units of private housing and executive condominium housing.

The government is also building an Executive condominium site to give more housing option to Singaporeans.

"If necessary, the government will make available even more sites for private residential development through the Government Land Sale programme next year," said the URA .

In addition to the new GLS sites for development, about 42,200 new units of private housing will be completed in the second half of this year to 2010. Of these, about 22,700 units have not been sold by developers yet.

Said the URA: "Prospective home-buyers should take into consideration the sufficient pipeline supply of private housing, as well as the potential supply from GLS sites, when deciding to make a property purchase."

Commenting on the outlook for the Singapore property market, Mr Ku Swee Yong, director at Savills Singapore Pte, told Bloomberg news: "Based on some of the funds we are bringing and the deals we are seeing, Singapore's attractiveness has increased tremendously. There's a lot of wealth growth and a very important indicator is the confidence going forward."

He forecast that at the end of last year that home prices in Singapore could rise 20 per cent in 2007.