PDF versionSingapore, - According to the Urban Redevelopment Authority’s (URA) flash estimates, overall prices in the private residential property market seem to be reaching a plateau. Price growth eased in 2Q 2008 to register a marginal climb of 0.4% quarter-on-quarter (qoq). In terms of the different market segments for non-landed homes, prices in the mid tier (Rest of Central Region) and the mass (Outside Central Region) expanded stronger than that of the prime market (Core Central Region).
Expansion of prices in the prime market, which rose by a slight 0.2% qoq, was the smallest amongst all the market segments. Essentially, the ascent of prices was initially experienced in this region and in the past two years, prices have increased sharply by 52.4%. Therefore, on this basis, it is not surprising that this market segment would lead the slowdown in price growth.
Despite the mass market witnessing a deceleration in the rate of price growth, it still managed to outshine that of the other two segments when prices strengthened by 1.3% qoq. This could be attributable to the healthy performance of the HDB resale market with the HDB resale prices increasing by 4.4% qoq (based on HDB’s flash estimates). In addition, fervent demand from HDB upgraders would have aided in fuelling expansion in the mass-market segment. As most buyers in the mass-market segment would be owner-occupiers, the relatively easier financing would aid their ability to purchase their properties.
The strong 4.4% quarterly growth in HDB average resale flat price indicates that the HDB market segment is still expanding steadily due to the healthy demand. Part of the demand for resale HDB flats is contributed by first-time homebuyers who cautiously choose to buy HDB flats due to the current uncertain market environment.
Going forward, it is anticipated that price growth in the private residential market for the whole of 2008 will fall within the range of 2% and 6% year-on-year (yoy).
Nicholas Mak, Director of Consultancy & Research Department, Knight Frank, +65 6228 6821
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