Your trusted professional real estate consultants

Call Us Today: (+65) 87802713


Resale suburban prices rise

resale suburban property

AVERAGE resale prices for suburban condominiums exceeded $1,000 psf last month, the first time they have passed what for many buyers is a daunting level.

Prices rose 5.1 per cent to a record $1,046 psf in February compared with January, said the Singapore Real Estate Exchange (SRX) yesterday.

Average condo resale prices in the city fringe were also up last month, adding 3.1 per cent from January to a record $1,272 psf.

OrangeTee research and consultancy head Christine Li said prices in these areas probably rose because buyers were going for smaller homes with lower total quantums, likely in response to lower borrowing limits and higher cash down payments imposed in January’s cooling measures.

“As small units typically have higher per square foot prices than larger units, we expect resale prices in psf compiled by SRX to go up in the coming months,” she added.

In contrast, average resale prices in the city centre declined 4.7 per cent month-on-month to $1,788 psf in February.

R’ST Research director Ong Kah Seng said the dip reflected significant unsold new homes and weaker leasing demand due to firms cutting expatriate allowances amid global economic uncertainty.

The SRX also reported that the Chinese New Year break resulted in February resales dropping by more than half from January.

Only 325 resales were carried out last month, according to flash figures, but that was still higher than the 309 transactions reported in January last year, the month in which Chinese New Year fell.

The continued growth in property values combined with softer rents also squeezed rental yields.

Yields dipped 0.2 per cent in the city fringe and suburban regions last month from January, although they inched up 0.1 per cent in the city centre.

Rents fell islandwide, with the sharpest decline in the city fringe, down 1.9 per cent in February from January.

Suburban home rents fell 1.6 per cent and city centre rents decreased 0.4 per cent.

However, rents for shoebox units – flats up to 500 sq feet – went the other way, rising 1.8 per cent in psf terms overall.

Shoebox apartments rented for $6.17 psf per month on average in suburban areas last month, twice the $3.07 psf for larger units in the same region, according to SRX flash figures.

That was almost as high as city-fringe shoebox rentals, which were $6.34 psf per month on average. Their larger counterparts had monthly average rentals of $3.80 psf.

Rentals for city centre shoebox units were $7.40 psf per month on average, 63 per cent higher than the $4.54 psf for larger units in that area.

Private property prices set to keep rising in 2013: Report

SHARPLY rising land costs, strong developer balance sheets and low interest rates should all combine to make 2013 another halcyon year for the property industry, an expert said.

Overall private home prices are likely to keep climbing on the back of rising land costs, increasing by up to 10 per cent next year, Savills Singapore research head Alan Cheong said in a report released yesterday.

Non-landed mass market homes are expected to see the steepest rise of 10 to 15 per cent, while the luxury market may also enjoy a 3 to 5 per cent price gain, surpassing its previous peak in 2007.

This is because astute buyers will continue to seek good buys in the luxury segment, as prices here are still lower than in Hong Kong, Mr Cheong added.

The property market has enjoyed a banner year, with a record-breaking 19,792 new homes sold in the first 10 months of the year, surpassing the previous high of 16,292 for the whole of 2010.

Executive condominiums (ECs) have also enjoyed a spectacular run, with more than 4,000 units expected to be sold by the end of the year – another record.

Only 3,935 EC units were sold in 2010 and last year combined.

“Due to a significant run-up in private condo prices, ECs will remain an attractive long-term investment asset, with demand probably surpassing that of 2012,” the report noted.

But tiny shoebox homes of 500 sq ft or less seem to have fallen out of favour with home buyers.

The proportion of shoebox homes sold, out of all new condo sales, has fallen from a three-year peak of 21 per cent in the third quarter of last year to a low of just 7 per cent in the fourth quarter of this year.

This is also well down from the three-year average of 14 per cent, Savills’ noted.

“The downtrend could be due to fewer shoebox units being built. There has also been an increase in demand for larger-sized units in tandem with the growth in wealth here,” the report said.

But the overall property market remains resilient and now has “too strong a momentum to stop”, Mr Cheong added.

Quantitative easing in the United States should see liquidity flowing into Asian economies like Singapore in search of a safe haven and currency appreciation.

Coupled with rock-bottom interest rates that are likely to remain low next year, some fresh external demand could be anticipated, he said.

However, this may be offset by local buying fatigue from the many new launches over the past years and increasing home completions.

Barring further property measures, total primary sales may hover between 16,000 and 18,000 units next year, less than this year’s likely record of 23,000 to 24,000 units, the report noted.