Non-landed private home prices up in Jan

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Published March 1, 2011

Non-landed private home prices up in Jan

2.6% jump in NUS index surprises analysts

By UMA SHANKARI


PRICES of non-landed private homes rose 2.6 per cent in January, according to the monthly index compiled by the National University of Singapore (NUS).

NUS's Singapore Residential Price Index (SRPI) shows that the growth in home prices gained momentum last month. Prices rose one per cent in December 2010 and remained flat in November.

For the whole of 2010, the SRPI climbed 11.9 per cent.

Analysts were surprised by the larger than usual jump in the number for January 2011, as the government imposed more demand-side measures to cool the property market in mid-January.

But most of the gain could have been racked up in the two weeks before the measures were implemented, they said.

Knight Frank chairman Tan Tiong Cheng said that it is possible that prices could have climbed before the measures were announced on Jan 13.

He also said that the large number of small, or shoebox, units sold in January could have pushed up the index as such units sell for higher per square foot prices.

NUS computes the index using the market values of a basket of completed properties. Uncompleted projects are not included in the basket, but the impact of new launches on the prices of completed properties in the vicinity is factored in.

According to the NUS index, prices of non-landed properties rose in both the central and non-central parts of Singapore in January.

The sub-index for the central region showed that in January 2011, prices of non-landed private homes in Singapore's central region (districts 1-4 and 9-11) appreciated by 2.7 per cent.

Prices rose by a slightly lower 2.5 per cent in the non-central region.

Developers and analysts have said that private home prices may fall this year following January's anti-speculation measures, although they are not expecting a sharp drop.

Private home prices could fall 3-5 per cent this year but are unlikely to plunge, said City Developments executive chairman Kwek Leng Beng last week.

UBS Investment Research analyst Adrian Chua likewise expects mass-market prices to fall 5-10 per cent this year, with the other segments remaining relatively stable.

'However, we do not think that prices will collapse, even as the policy regime enters uncharted waters in terms of the severity of the cumulative measures,' said Mr Chua in his Feb 23 note.

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Mar 1, 2011

Private home prices in central region rise in Jan


PRIVATE home prices in the central region rose strongly in January compared with the month before, after a slide in December, according to an index.

Prices were up 2.7 per cent in January after easing by 0.8 per cent in December, compared with November, said the latest flash estimates for January from the National University of Singapore (NUS).

This was despite the latest round of property cooling measures unveiled by the Government in mid-January.

The NUS Singapore Residential Price Index defines central region homes as those in Districts 1 to 4 and 9 to 11, and measures prices of completed non-landed private homes.

Property analysts say central region homes are less susceptible to such measures, as buyers tend to be cash-rich and do not need to borrow to the same extent.

They also say home prices in the central region are still lower than the all-time high in early 2008.

Prices of homes outside the central area also gained ground, up 2.5 per cent in January, a little stronger than the 2.3 per cent rise in December. The overall index rose 2.6 per cent in January, up from 1 per cent in December.

Cushman & Wakefield's senior manager of Asia-Pacific research Ong Kah Seng said resale homes are about 20 per cent cheaper than new ones - perhaps prompting buyers to look at resale properties.

Other analysts said the figures indicate that demand for completed homes is coming from genuine home buyers, with January's round of cooling measures wiping out most of the speculative activity.

Still, analysts caution that the recent data might not accurately reflect the impact of the measures on the market.

'The measures were brought in on Jan 14, halfway through the month. Before that the market had already enjoyed half a month of brisk sales, which the data would also capture,' said PropNex chief executive Mohamed Ismail.

Colliers International director of research and advisory Tay Huey Ying said a price decline is not in sight. 'Demand fundamentals like low interest rates, high market liquidity, strong employment figures and rising wages all point towards a continued increase.'

She expects moderated price rises.

Figures from the Monetary Authority of Singapore out yesterday show home loans growth holding up. Preliminary data for January points to 1.6 per cent growth in mortgage numbers to $112.4 billion compared with December - even better than December's 1.3 per cent growth.

RBS research analyst Trevor Kalcic said this 'probably primarily reflected continued strong drawdowns on loans made prior to the introduction of government property cooling measures last August and in January this year'.

CHERYL LIM