Source : The Business Times, January 25, 2008
Singapore's private home prices rose a slower 6.8 per cent in October-December from the previous quarter, reflecting concerns about the global outlook and the effect of measures to cool the market, data showed on Friday.
Prices are at their highest in more than 10 years and near the peak of mid-1996 just before the Asian financial crisis, but sentiment has cooled as the republic's economy unexpectedly shrank in the fourth quarter from the previous three months.
The Urban Redevelopment Authority's (URA) price index for private residential property, a gauge of profitability for property firms and an indicator of inflation, rose 8.3 per cent in the third quarter.
Private home prices rose 31.2 per cent in the whole of 2007, the authority said in a statement.
'This is actually a more sustainable rate of growth as we don't want the market to head to another bubble and force the government to tighten even more,' said Nicholas Mak, head of research at property consultancy Knight Frank.
Mr Mak estimates that the index will rise another 15 per cent in 2008, bringing the URA price index past the historical record high of 181.4 reached in the second quarter of 2006.
The slower growth in home sales comes on the heels of recent measures taken by the authorities to curb speculation in the real estate market.
The Singapore government in October stopped letting developers sell uncompleted property on a deferred payment scheme.
Other measures included raising development charges to make it more expensive for companies such as CapitaLand and City Developments to buy out existing condominiums for redevelopment into larger apartment blocks with more units.
The number of uncompleted private homes sold by developers fell to 1,397 during the fourth quarter, much lower than the 3,367 units in the July-to-September period.
Still buoyant
Private apartments in Singapore's prime central regions, however, continued to lead price gains, although homes in the rest of the island were also more costly.
Private home rents rose 6.8 per cent in the period, easing from the third quarter's 11.4 per cent, bringing the overall increase for the year to 41.2 per cent.
A separate index showed resale prices of government-built apartments, housing some 85 per cent of Singaporeans, rose 5.7 per cent in the fourth quarter, slower than the 6.6 per cent in the previous quarter.
This brought the full-year increase for resale government-built flat prices to 17.5 per cent.
Higher housing costs have pushed up inflation with the annual consumer price index in December rising 4.4 per cent, the biggest jump in 25 years, the government reported on Wednesday.
Office rents rose 10.9 per cent in the fourth quarter, against the 14.8 per cent increase recorded in the previous three months.
For the full year, office rentals in Singapore jumped 56.1 per cent, reflecting a lack of new space as more multi-nationals set up offices in the republic.
The authorities have tried to temper price rises by releasing more land and assuring the market about supply.
'Supply is in the pipeline to meet demand over the next few years,' the URA said in a statement.
The authority said that 56,149 private homes and 1.21 million square metres of office space are expected to be completed between 2008 and 2011. -- REUTERS
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