A confluence of favorable market factors could propel Singapore property prices past previous peaks in 2010. However, new government property restrictions on resale and foreign ownership have helped stymie speculation and rein in price growth. See the following article from Property Wire for more on this.
Soaring property prices in Singapore are slowing a little but are still on target to increase by up to 20% in 2010, according to analysts.
The government’s anti-speculative measures for the property market appear to have slowed growth with prices rising 5.1% in the first quarter of 2010, down from 7.4% in the previous three month period, the figures from the Urban Redevelopment Authority (URA) show.
At this rate, analysts expect prices to return to the 2008 peak levels before the end of this year and growth may reach 6% once deals done at the end of March are taken into account.
Market watchers expect home prices to increase by between 15 and 20% for the whole of 2010 and this growth will be led by the middle tier and high end segments of the real estate market. Experts said higher land prices seen in recent tenders will continue to support price growth.
Desmond Sim, associate director of international consultants Jones Lang LaSalle, said the highest rate of decline was in the core central region of the country at 2.8%. ‘Traditionally the core central region is for speculators. It is a sign that short term speculation has been curbed by these measures,’ he explained.
Private homes in the city cost 4.5% more while those in the city fringe went up by 7.2%. While mass market home prices, which have already hit their peak, grew 3.9% in the first quarter, the figures also show.
Property analysts said home prices could breach the peaks set in 2008 and 1996 within the next three to six months. ‘If these predictions were to come true then prices would have surpassed the 2008 peak by up to 14% and that would be for the mass market projects. But across all levels it would have hit 2008 peak by around 3% for high tier and 9% for the mid tier projects,’ explained Tay Huey Ying, director of research and advisory at Colliers International’
The cooling measures mean that buyers of non-subsidized Housing and Development Board (HDB) resale flats must now occupy their property for at least three years before they can sell it. The HDB has also imposed limits on the number of HDB flats in each block and neighborhood that can be sold to non-Malaysian permanent residents to prevent foreigner enclaves from developing.
CB Richard Ellis research executive director Li Hiaw Ho said that positive sentiment, a recovering economy and low interest rates will combine to sustain a favorable home buying market. ‘But as supply begins to catch up with demand, price increases may assume a more moderate level in the second half of the year,’ he added.
In the private residential segment, developers have achieved brisk sales in the first three months of 2010, around 4,000 units or double the preceding quarter’s numbers, according to CB Richard Ellis’ estimates.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.