Private Home Prices Up 4.6% in the first quarter 2007

SINGAPORE: Prices of private residential properties have continued to climb - marking their largest quarterly gains in seven years during the first three months of the year.

According to initial estimates out today, private home prices rose by 4.6 per cent, compared to the previous quarter. The high end sector continued to lead the climb in private home prices in the first quarter of this year. Apartments in the newly-defined Core Central Region booked the biggest jump of 5.6 per cent.

The region includes Sentosa, Marina Bay, and postal districts 9, 10, and 11. "Due to the spate of collective sales, we are seeing more and more projects in the price range of $2000 to $3000 per square foot being launched. And confidence breeds confidence, so developers are continuously putting up projects at higher and higher prices. And the robust demand from foreigners has continued to give support to this price rise," said Tay Huey Ying, Director of Research, Colliers International.

Prime properties sold at above $2000 per square foot during the period include units at St Regis Residences and The Orchard Residences, both in the Orchard area. In the rest of the Central Region, prices rose by 2.9 per cent - while properties outside the Central Region saw a climb of 2.6 per cent. "We're actually seeing the bullish price growth in the luxury and high-end tiers filtering down to the lower tiers, and this is becoming more broad-based. So the broad-based recovery in prices will lift property prices further in the coming quarters," said Tay.

Analysts say that for the whole year - private home prices could climb by about 15 per cent - up from 10.2 per cent last year. In the HDB resale sector, prices rose 1.2 per cent in the first quarter - marking the highest increase in nearly three years.

The HDB price index showed a reading of 104.8 in the first quarter - up 1.2 per cent from the previous quarter. And property agents expect the uptrend to continue, partly because of relaxed subletting rules which allow more flat-owners to rent out their flats.

"With the revision of the subletting rules, owners of the flats can actually sublet their homes while waiting for property prices to improve. As such, because of the shortage of resale flats in the market, the prices will definitely increase," said Marcus Chu, Senior Vice President, ERA.