Jul 2, 2011

[B][SIZE="5"]Price rises for suburban homes slow down in Q2[/SIZE][/B]

By Cheryl Lim

PRICES of new suburban homes were up in the second quarter but the pace of those rises slowed, probably because developers launched projects in less popular areas.

Suburban prices rose 1.6 per cent in the three months to June 30, well under the increases of 3.1 per cent recorded in the first quarter. The figures are from flash estimates released by the Urban Redevelopment Authority yesterday.

Some property watchers said projects in less popular locations - perhaps farther away from transport links and community facilities - may have resulted in lower selling prices of some suburban homes. Savills research head Alan Cheong said some new residential projects launched in April may not be in locations as attractive as those launched earlier. His own analysis showed that prices of mass-market homes dipped 5 per cent quarter-on-quarter to $975 per sq ft.

Ms Chia Siew Chuin, Colliers International's director of research and advisory, said price resistance is setting in with buyers becoming increasingly cautious and price-sensitive towards homes in suburban areas. The second quarter recorded an overall price increase of 1.9 per cent. Prices of homes in prime districts rose 1.6 per cent while those on the city fringe increased by 1.2 per cent.

Many analysts agreed that the several rounds of cooling measures are making their presence felt.

Credo Real Estate's head of research and consultancy, Mr Ong Teck Hui, said new projects will have to be priced realistically to get healthy sales.