Prices on residential real estate in Singapore are edging back to peak levels, but February’s figures were flat. The new SRPI index does not include newly launched projects, though, which accounted for much of the month’s sales. See the following article from Property Wire for more on this.
Singapore’s new residential real estate price index shows that property prices edged up 0.2% in February after increasing 2.2% in January.
The rise comes on the back of a 22.2% increase in 2009, putting the index’s current value just 0.4% below its peak in November 2007.
The much awaited new SRPI index, which is compiled by the Institute of Real Estate Studies at the National University of Singapore, tracks month-on-month price movements in the private non-landed residential property market using a basket of 364 completed projects.
By contrast, the official Urban Redevelopment Authority (URA) private residential property price index, which is released every quarter, includes transactions at new launches and sub-sales.
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According to the URA index, private home prices hit a recent high in the second quarter of 2008 before falling for the next four quarters. Property prices then recovered, rising 15.8% in the third quarter of 2009 and 7.4% in the fourth quarter. But the URA index is still some 6.6% from its peak in the second quarter of 2008.
Analysts said that the SRPI moved up only slightly in February as most of the market activity centered on new launches. Developers sold 1,196 new homes in February, slightly less than the 1,480 new homes sold in January. But market watchers said that in the resale market, sales of units in completed projects, there was a larger month-on-month fall in the transaction volume.
‘The new index is for completed properties and most of the price movements and market activity over the last few weeks have been seen for new launches. Prices at completed properties are also more stable as these projects tend to draw a different type of investor as compared to new launches,’ said Colin Tan, director of research and consultancy at Chesterton Suntec International.
Tay Huey Ying, director for research and advisory at Colliers International, said that the index was flat in February 2010 as only properties completed between October 1998 and September 2009 are included in the basket.
Associate Professor Lum Sau Kim, who leads the group that compiles the new index, said one key feature of the SRPI is that it is not too affected by new launches. It is also designed to not be unduly influenced by low transaction volumes in a quiet market.
She attributed the marginal movement in the index for February to the Chinese New Year season, when buying activity traditionally tapers off.
The SRPI also showed a drop in home prices in the central region, postal districts one to four and nine to 11, in February. Prices there fell 0.1% after climbing 1.6% in January.
For the whole of 2009, prices in the central region rose 27.3% but are still around 10% off the pre-crisis peak, according to the index. Elsewhere, prices in the non-central areas rose 0.5% after climbing 2.7% in January. Private home prices in the non-central regions have now exceeded the pre-crisis peak.
Analysts predict that when the URA flash estimates are released this month, it will show that private home prices climbed 5 to 8% in the first quarter of 2010.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.