http://www.businesstimes.com.sg/arch...-best-20130629

Published June 29, 2013

Central Region home prices perform best

They outperform rest of market for non-landed private homes for 3rd straight month in May

By

Kalpana Rashiwala

[email protected]


PRICES of completed private apartments and condos (excluding small units) in the Central Region continued to outperform the rest of the market for the third consecutive month, according to latest flash estimates from the National University of Singapore (NUS).

Market watchers say this ties in with anecdotal evidence of investors warming up to older apartments in the Central Region, where prices are looking relatively attractive following the sharp run-up in prices of suburuban properties in the past couple of years.

NUS' Singapore Residential Price Index (SRPI) for Central Region rose 1.5 per cent in May over April, a better performance compared to a drop of 1.6 per cent in the SRPI for Non-Central Region. Both indices exclude small units.

SRPI for small apartments and condo units (up to 506 sq ft) islandwide eased 1.3 per cent month on month in May.

Central Region is defined as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11.

The Overall SRPI for May was down 0.2 per cent from the previous month.

Minted by NUS' Institute of Real Estate Studies, the SRPI series tracks prices of completed non-landed private homes excluding executive condos.

In April, the SRPI posted gains across the board. It picked up 1.9 per cent in Central Region, 1.8 per cent in Non-Central Region and 1.4 per cent for small apartments. The Overall SRPI appreciated 1.9 per cent.

Year to date, the SPRI in Central Region has risen 3.4 per cent, ahead of a 1.4 per cent gain for Non-Central Region.

However, small apartments islandwide fared better, with a 4.2 per cent hike.

The Overall SRPI has risen 2.3 per cent over the same period.

Ong Choon Fah, chief operating officer at DTZ, says: "In the past 18-24 months, a lot of demand has focused on the new private residential project launches in the suburbs or Non-Central Region. This has also provided an uplift in prices of existing apartments nearby. Against this backdrop, investors have been starting to see better value in older apartments in the Central Region."

This trend may continue in the near term, provided prices in Central Region do not shoot up too fast, Mrs Ong adds.

International Property Advisor's CEO Ku Swee Yong says: "The outlook for Districts 9, 10 and 11 could be more shaky now that signs of weakness in China and its credit system are emerging. But there are some people who tell me that because China is a bit iffy now, Chinese buyers may in fact have greater urgency to invest overseas including the Singapore real estate market."

Eugene Lim, key executive officer at ERA Realty Network, predicts that prices of properties in the Central Region will "decline moderately as there are still a large number of high-end and luxury condo developments with unsold units even though they were completed two or three years ago".

"Owners in the luxury condo market are increasingly willing to negotiate on their asking price and buyers are looking for discounts," he added.