Private home prices rebound 4% in 2005
THE property market seems to have finally turned the corner with private home prices increasing 3.9 per cent last year, well up on the paltry 0.9 per cent rise in 2004.
Prices have now risen by 5.2 per cent since they hit rock bottom in the first quarter of 2004 but levels overall are still 34.8 per cent below the 1996 peak.
At least the trend is positive. The Urban Redevelopment Authority (URA) showed that prices in the last three months of 2005 rose 1.4 per cent, their biggest quarterly rise in more than five years.
But the recovery has been led by high-end homes while the mass market has yet to kick off though HDB resales are showing signs of life. HDB resale flat prices edged up 0.4 per cent in the fourth quarter after falling by 5.2 per cent in the preceding six months.
ERA Singapore’s assistant vice-president, Mr Eugene Lim, said HDB resale prices have not recovered as quickly as private homes because there is still an overhang of 9,000 unsold flats. Although overall resale volume is down, the resale volume of larger flats rose and could translate into more upgraders for mass market projects, he said.
Indeed, if the mass market projects planned for this year sell well, ‘we may then see a broad-based recovery’, said Knight Frank research director Nicholas Mak.
And while fourth-quarter sales of new homes fell, overall sales last year reflect ’spectacular growth’, he said. Developers sold 8,955 new homes, way above the 5,156 units in 2003 and 5,785 units in 2004. Mr Mak expects sales of up to 8,300 units this year.
‘The total number of unsold units, which hit a peak of 20,200 in early 2001, has fallen to 11,600 at end-2005, the lowest level since 2000,’ he said.
Also, 7,582 units were sold in the secondary market last year, up from 5,488 in 2004 and 4,794 in 2003.
Last year also saw more overseas buyers. Foreigners, including permanent residents, accounted for 31 per cent of buyers in the high-end segment, up from 27 per cent in 2004 and 25 per cent last year, said URA.
Overall, prices could climb by around 5 per cent this year, with luxury homes jumping by about 20 per cent, said CB Richard Ellis executive director Soon Su Lin.
Source : Straits Times - 28 Jan 2006
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