http://www.straitstimes.com/Money/St...ry_749742.html
Slow rise in resale prices of private homes
Flash estimates show 1.7% increase in Nov from previous month
Published on Dec 29, 2011
By Melissa Tan
RESALE prices of private homes kept rising last month, but it was at a snail's pace.
Flash estimates for the Singapore Residential Price Index (SRPI) released yesterday showed that overall private home prices rose 1.7 per cent last month from the previous month.
In comparison, the revised prices for October show a 1 per cent overall rise, after a dip in September.
The previously released flash estimates for October had indicated a 0.9 per cent overall price rise.
The overall SRPI, which tracks a basket of completed non-landed projects, could have been influenced by some spillover from the buoyant primary market last month, said experts.
Mr Png Poh Soon, head of research and consultancy at Knight Frank, said that the fact that 'only the small units have come off a bit, (while) the rest went up by close to 2 per cent' could indicate a more buoyant market last month.
But he cautioned that the SRPI readings would be affected by the number of transactions each month.
The largest price rise last month, according to the flash estimate, was from private homes in non-central areas.
Values rose 1.8 per cent, building on October's revised 0.8 per cent increase.
Prices of centrally located homes, excluding flats of less than 500 sq ft, recorded a gain of 1.5 per cent last month, compared with the 1.3 per cent rise in October.
Said Ms Chua Chor Hoon, head of Asia-Pacific research at DTZ Debenham Tie Leung: 'The higher November increase in prices for non-small units could be due to spillover effect from the exuberant primary market in November, which saw close to 2000 new units launched.'
As for the difference in price gains between central and non-central apartments last month, Ms Chua said that since the SRPI also 'depends on the kind of units that were transacted in each month... there could be some variance'.
The only contraction last month was in the prices of apartments of 506 sq ft or less.
Prices for these shoebox units slipped 0.2 per cent last month, after inching up 0.7 per cent in October.
One factor, as DTZ's Ms Chua noted, could be that 'there aren't so many of them in the secondary market yet, so the number of data points could cause some volatility. The final number could be different'.
Mr Donald Han, vice-chairman of Cushman & Wakefield Singapore, said we could be at the 'tail end' of the 'initial rush for small units' that occurred some 12 months to 18 months ago, and which spurred the 'feverish take-up' of such units by both locals and foreigners.
'Moving ahead, I think the movement for small units will probably keep pace with the rest of the market.' he added.
Mr Han noted that even though last month's flash estimates show positive growth, it could be 'a very temporary phenomenon... the last we'll see of positive movement'.
'Next month, we will probably see the index moving south, potentially even contracting for the month of December, where we'll see the full impact of the Dec 7 cooling measures,' he added, referring to the additional buyers' stamp duty introduced early this month.
'We could be going into negative territory.'
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