Prices rising across the board in property market

From Straits Times – July 28, 2007:

“Private homes the biggest winners, but HDB resale prices also up 3 per cent

By Joyce Teo, Property Correspondent

THE property boom is now ringing across the country, with all segments, including the HDB market, recording rising prices.

The biggest winners were private homes, with prices up 8.3 per cent in the April to June quarter. This is on top of a 4.8 per cent increase in the first three months of the year.

The number of new homes sold hit a record 5,129 units in the second quarter, 7 per cent up on the first quarter.

Landed homes, which have not moved much over the past year, also sprang into life and registered price rises of 7.1 per cent, up from 2.9 per cent in the first quarter.

And resale prices in the HDB market rose 3 per cent, up from a 1.25 per cent rise in the first quarter.

‘The benefits of the improving economy are now being seen more widely across the board, demonstrated by the mass market increases and a higher number of HDB upgraders,’ said property firm Jones Lang LaSalle’s regional managing director, Mr Chris Fossick.

Government figures also show that demand is pushing up private home prices in most parts of the country.

Prices in central Singapore, the city fringes and suburban areas rose between 7.2 per cent and 8.1 per cent in the second quarter.

‘The even performance across all regions…is a positive as it implies that there is now greater uniformity in wealth creation across all segments,’ said Ms Tay Huey Ying,of property consultancy Colliers International.

The wealth of data released yesterday by the Urban Redevelopment Authority (URA) – it included new information on housing rentals and office rents – also revealed some notable developments in the roaring market.

One was the bigger jump in prices of completed homes over uncompleted ones.

In the central core region – where the most expensive housing is found – prices of completed homes rose 8.5 per cent, compared with 7.1 per cent for uncompleted ones.

Usually, glamorous launches of prime homes attract higher prices than completed ones. But the huge number of displaced en bloc sellers looking for a roof over their heads has boosted demand for existing property.

Consultants said that because of strong leasing demand – in part contributed by owners and tenants displaced by en bloc sales – completed properties have become more attractive for investors, too.

Indeed, rents have been soaring, with some owners demanding a doubling of rent or more – and getting it.

The new figures have also cast more light on property speculation. In the second quarter, owners’ sales of uncompleted homes amounted to less than 10 per cent of the total deals done.

But there was a hike in the prime central core region, where such sales accounted for 19.4 per cent of deals done. This is up from 12.4 per cent in the first quarter.

By contrast, in the second quarter of 1996 – when speculation was rife – subsales accounted for about 28 per cent of all deals.

On the supply side, 43,018 – mostly flats but with about 3,000 houses – will be built between now and 2010, the URA said. About 76 per cent of these will be completed in 2009 and 2010.

Overall, private home prices are now about 18.5 per cent below the 1996 peak and at a level similar to that in the second half of 1994.

Also yesterday, the HDB released more information on sales, including median resale prices, rental data and the amount of cash-over-valuation (COV) that buyers are paying.

It shows, for example, that the median COV for a five-room flat can reach $60,000 in Bukit Timah town, but is zero in Woodlands.

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