Published by The Straits Times, Singapore,
Friday, 26-March-2010, front-page headline
RESALE prices for private homes have gone through the roof this
year and are now above the sky-high levels seen in the 2007
boom.
A
Savills Singapore report said average values in the segment in
January and last month shot ahead of the dizzy heights set three
years ago.
The soaring prices are part of a larger picture that depicts the
entire real estate sector roaring along in top gear.
Rising prices in the HDB market - and high launch values for new
homes - are helping to push buyers into private resale homes, say
experts.
Savills research showed that average prices for non-landed
private resale homes have surpassed the 2007 peak by 6 per cent
while landed home prices are 15.6 per cent ahead.
Private resale home prices are also now above the 1996 peak.
This means they are at the highest level ever seen, said Ms
Christine Sun, the firm's senior manager for research and
consultancy.
'HDB resale prices are on the rise and prices of new launches
are quite high, so private resale homes have become a popular
alternative for buyers,' said Ms Sun. Savills found that average
resale prices of homes in the mass market, mid-tier and high-end
segments have all crossed the 2007 peaks.
In the first two months this year, average mass market prices
were at $662 per sq ft (psf), up 19 per cent from $555 psf in 2007.
Average resale prices of mid-tier homes were $886 psf, up 19.7 per
cent from $740 psf in 2007.
It was not as buoyant in the high-end segment where average
prices reached $1,425 psf in January and last month, up 11.8 per
cent from $1,275 psf in 2007.
But there have still been some gilt-edged deals in this segment
this year. At The Sail @ Marina Bay, 15 units transacted for more
than $2,000 psf to as high as $3,204 psf, said Ms Sun.
Private property proved unexpectedly resilient during the
downturn. Prices of resale high-end homes suffered a marginal
decline of 0.2 per cent from 2007, said Savills.
Prices for homes in the mid-tier segment rose 5.6 per cent while
mass market ones increased 6.8 per cent.
Knight Frank chairman Tan Tiong Cheng said yesterday: 'Once
there are no suitable new launches in a certain area and there's a
huge gap between prices of new launches and old projects, people
will chase after the old projects.'
While prices are up, sale numbers are still lagging those of the
boom years. Resale volume has picked up in the past two months, but
it has not surpassed the resales done in the first quarter of 2007,
said Ms Sun.
Nonetheless, the Savills report showed that resale volume last
year was strong, more than doubling those in 2008. But the 15,009
resale deals done last year are still below the 2007 peak level of
20,665 deals. Sales of new homes in comparison totalled 14,725
units last year and 14,811 units in 2007.
Consultancy Cushman & Wakefield managing director Donald Han
told The Straits Times: 'The market is seeing activity at all
levels. It remains active despite measures introduced by the
Government. Given that new launches have been largely well
received, it is natural to see resale prices rise in
tandem.'
Owners of completed homes can also cash in on the popularity of
new projects nearby that are selling at high prices, experts said.
In the resale market, owners of homes near new launches that are
selling at higher prices would have a better bargaining power when
it comes to negotiating for higher prices.
But not every project has reached its peak price, experts
cautioned. In the new launch market, mass market and mid-tier
prices have exceeded the 2007 peak but luxury homes are still about
15 per cent to 20 per cent below that peak.