RESIDENTIAL MARKET
Private home prices set to rise further
Private home prices may keep inching up this year after the cost of suburban land rose an average of 22 per cent last year from 2011, a new report said.
Developers jostled to replenish their landbanks and were prepared to bid aggressively to secure sites on offer.
This sharp rise in land prices may translate to some upward pressure on selling prices for future projects in the primary market, the report said.
"Nevertheless price increases will be capped by increased competition from other new projects as well as the substantial number of private home completions in 2013," the report added.
The number of Chinese buyers who bought private non-landed homes costing more than $5 million has increased significantly.
It went from 14 in the first six months of last year to 13 in the third quarter and 20 in the final three months of the year. These homes were in the traditional prime districts 9 and 10, the company's analysis showed.
Resale prices in the luxury segment dipped by 1.3 per cent last year after the imposition of the additional buyer's stamp duty in December 2011. This came after a 1 per cent gain in 2011.
However, the fall was mainly in the first half of last year, and prices stabilised in the second half, as buyers returned to the market to look for value.
A record high of 20,879 new private units were snapped up from January to November last year, mainly fuelled by the supply of sites from the Government Land Sales (GLS) programme.
New home sales this year could come close, but are not likely to exceed last year's figures.
This is because lower sales of tiny shoebox units are expected due to the Government's cap on the number of homes in non-landed private residential developments outside the central area.
The increases in private-home prices were moderated last year, compared with the year before.
However, the landed-home segment still led the charge, with terraced homes posting the largest rise of 9.7 per cent.
Resale prices of leasehold condos were up 3.4 per cent last year - a slower pace than the 8.4 per cent gain in 2011.
The slowdown, however, was largely in the first half of the year. The pace of growth picked up in the third quarter, before accelerating further in the fourth.
Source: The Straits Times –11 January 2013
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