Private home prices sneak up

The Urban Redevelopment Authority's second quarter flash estimates showed that its benchmark private home price index rose 0.8 per cent from Q1, supported by a 3 per cent escalation in prices of non-landed homes in suburban areas. This compares with respective increases of 0.6 per cent and 1.4 per cent in Q1.

Property consultants and analysts seem loath to forecast price drops in the near future despite predicting a decrease in the number of transactions for private homes after Friday's rollout of standardised guidelines for financial institutions to implement a total debt servicing ratio (TDSR) not exceeding 60 per cent of a borrower's gross monthly income, when granting property loans.

At the same time, the Monetary Authority of Singapore acted to plug some loopholes used to circumvent tighter loan-to-value limits on second and subsequent housing loans and longer-tenure loans.

Observers say the pool of non-traditional developers bidding at tenders has been expanding again lately to include some new players from China.

Property consultants attribute the 3 per cent escalation in URA's Q2 flash estimate for its price index for non-landed private homes in Outside Central Region (OCR) to new launches at relatively high prices - including Midtown Residences, Jade Residences and Spazio@Kovan. The Q2 index was up 9.4 per cent year on year.

Developers' sales of non-landed homes in OCR, the median price rose from $1,083 per square foot in Q1 this year to $1,185 psf in Q2. However, the median quantum per unit eased from $940,000 to $924,000, showing that absolute prices have remained affordable - due to a reduction in the median unit size from 88 sq m (about 947 sq ft) to 72 sq m (775 sq ft).

Analysts note that the Q2 flash estimate does not even factor sales evidence from last Friday's sellout of the 738-unit J Gateway at an average price of nearly $1,500 psf, a fresh record for the Jurong area. This could mean the final Q2 stats URA will release on July 26 could reflect an even bigger price hike in OCR.

URA's non-landed private home price index in Core Central Region (where the choicest homes are located, covering the prime districts 9, 10 and 11 as well as the financial district and Sentosa Cove) dipped 0.2 per cent q-on-q in Q2 - contrasting with a 0.6 per cent increase in the previous quarter. In Rest of Central Region (which covers city-fringe locations like Bishan, Potong Pasir, Toa Payoh, Balestier and Bukit Merah), the Q2 flash estimate reflects a 0.2 per cent q-on-q rise, identical to the Q1 performance.

URA's benchmark overall private home price index for Q2 was 3.9 per cent higher year-on-year.

Source: Business Times - 2 July 2013

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Private home prices sneak up

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