SINGAPORE: Prices of new private homes in Singapore rose to a new record in the fourth quarter of 2012.
This comes on the back of rising demand for private homes in the sub—urban areas.
Preliminary data from the Urban Redevelopment Authority (URA) showed a 1.8 per cent quarter—on—quarter increase to a record 211.9 points in the fourth—quarter period from the previous quarter.
But prices increased by about 2.8 per cent for the entire 2012, slower than 2011’s 5.9 per cent increase.
Despite the last quarter of the year being traditionally slower for the property market, rising demand for private homes lifted the URA Private Residential Property Price Index to its highest level in the last six quarters, according to SLP International.
Mr Eugene Lim, Key Executive Officer of ERA, said: "There have been projects that were launched in Q4. These were on plots of land that were bid at higher prices. So pricing for profit — the developers built on the momentum of the market and they went out at higher prices. So this accounted for a price increase in Q4."
The mass market segment, which are commonly located in the suburbs, increased the most — by 3.4 per cent.
SLP International noted that preliminary figures from SLP Research show that 61.3 per cent of all the private homes that were transacted in the last quarter were located in the outside central region (OCR).
The city fringes was 0.9 per cent higher while the high—end market, which are mostly located in the city, rose 0.8 per cent.
For the full year, home prices increased by 2.8 per cent and is slower than the 5.9 per cent rise in 2011.
Analysts say the government’s market cooling measures, such as the Additional Buyers’ Stamp Duty and the latest mortgage tenure curbs, have been effective to some extent in moderating price growth in 2012.
Prices are expected to climb but moderate in 2013.
Mr Mohd Ismail, CEO of PropNex, said: "I’m not expecting the moderation to come in the first half of this year simply because many of the land sites were bid, very much higher than the first half of last year. The first half, we would see a higher increment of 4 per cent, and the second half of the year tapering between 2—3 per cent. And that’s where the overall price increment of about 6—7 per cent."
Some analysts expect the Eurozone crisis to drive high networth individuals to invest in real estate in Singapore, boosting the high—end property market.
The mass market segment should also see double digit increases of 10 to 15 per cent in 2013 due to the rapid land price increases seen in last year’s Government Land Sales site tenders.
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