http://www.straitstimes.com/archive/...imely-20130126
Q4 spurt in property prices shows new curbs are timely
The late surge overshadowed a year of easing growth in home prices
Published on Jan 26, 2013
By Esther Teo Property Reporter
PROPERTY prices started shooting up late last year after months of lacklustre growth, indicating that the cooling measures imposed two weeks ago came just in time.
The late-year surge helped prices extend their record-breaking run.
Resale HDB flat values rose 2.5 per cent in the final three months of the year while median cash-over-valuations (COVs) increased for all flat types but accelerated most for executive units.
The median COV for this type of housing rose from $42,000 in the third quarter to $53,000 in the fourth, according to the Singapore Real Estate Exchange.
Private home prices were also heating up again - they were up 1.8 per cent in the fourth quarter, three times the 0.6 per cent increase recorded in the third.
Demand for suburban private homes was strong, sending prices up 3.8 per cent in the quarter.
The spurt in the final three months of last year went some way in overshadowing what was a year of easing price growth compared with the two high-octane years that went before.
The moderating price increases suggest the slew of cooling measures since 2009 have perhaps taken some wind out of the market's sails.
HDB resale prices gained 6.6 per cent last year while those in the private segment inched up just 2.8 per cent on the back of a record number of 22,197 new homes sold, according to the Urban Redevelopment Authority (URA) yesterday.
Those increases left values in both segments at record highs but the pace of increase has moderated sharply.
In the boom year of 2010, HDB resale prices rocketed 14 per cent while that of private sector homes were up an eye-watering 18 per cent.
It was not much calmer in 2011, with prices of HDB resale units up 11 per cent and that of private homes ahead 10 per cent.
So the 2012 numbers point to a sharp slowdown with more to come this year, warn some experts, who say the curbs unveiled two weeks ago could send prices down by as much as 5 per cent to 7 per cent by the end of the year. Sales volumes for new private homes could also plunge by as much as 30 per cent.
But PropNex chief executive Mohamed Ismail said that a drastic drop in private home prices is unlikely since interest rates remain low.
"Developers also paid high prices for recent land bids. As such, these developers are unlikely to price their upcoming new launches much lower. They are likely to hold on to their project sales until the market recovers," he added.
Some investors will shun real estate for now, while others may adopt a wait-and-see approach, said Mr Desmond Sim, associate director of CBRE Research.
Knight Frank research head Png Poh Soon expects prices in the high-end market to drop by 5 per cent to 7 per cent while mid-end and mass-market home prices could fall by up to 5 per cent this year. "Developers are likely to hold back unlaunched developments probably until after Chinese New Year. Launched projects are also likely to see enhanced marketing strategies such as furniture vouchers and greater discounts or cash rebates to entice home buyers."
It was a mixed bag for the other property sectors in the fourth quarter, with the industrial segment cooling for the first time since the third quarter of 2009. Prices dipped 0.7 per cent overall but office values managed to defy the trend, rising 0.3 per cent after a 1.9 per cent gain in the previous quarter.
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