First-time buyers support non-central condo prices

Amid the latest official flash estimate showing a slower quarter-on-quarter increase in private home prices in Q1 2013 than in Q4 last year, some property consultants believe that the latest cooling package in January will have a more lingering impact than the six preceding rounds.

However, prices in the widely watched Outside Central Region (OCR), home to suburban condos, are unlikely to fall this year given the strength of the first-time home-buyer pool, say some analysts.


The Urban Redevelopment Authority's (URA) flash estimates showed its price index for non-landed private homes in OCR still managed to rise 1.7 per cent quarter on quarter in the first quarter, though this was a much slower pace of increase compared with the 3.8 per cent jump seen in Q4. The increase for Core Central Region (which includes Singapore's choicest residential locations) too slowed to 0.4 per cent in Q1, from a 0.7 per cent rise in Q4. In Rest of Central Region (which refers to city-fringe locations), the index was flat in the first quarter after climbing 0.9 per cent in Q4.

URA's overall private home price index inched up 0.5 per cent quarter on quarter in Q1, a slower rise than Q4's 1.8 per cent increase. Most property consultants expect the URA's OCR price index to outperform the market in 2013 as in the past two years.

Many industry players believe that unlike earlier rounds of measures, the bite from the January package will last longer.

Developers are expected to have sold more than 2,000 private homes in March, after the pullback in February in the aftermath of January's cooling package and due to the Chinese New Year festive period. Some analysts reckon the final figure for Q1 is likely to have crossed 5,000 units - close to last year's average quarterly figure of 5,549.

However, resales of completed private homes have slowed sharply amid a buyer-seller price gap, say agents.

Meanwhile, talk in the market is that Kingsford Development, controlled by Chinese citizens, has moved fewer than 100 units in Kingsford.Hillview Peak, a 512-unit condo. It is said to have begun sales on Good Friday at an average price of about $1,400 per square foot (psf) but in the face of slow sales, gave additional discounts amounting to about $50 psf.

The URA's overall private home price index in Q1 was up 3.4 per cent. This is similar to the 3.5 per cent year-on-year gain in Q1 last year. And the 7.2 per cent year-on-year hike reflected in the Q1 2013 OCR non-landed private home price index is the largest since the 7.7 per cent rise in Q4 2011.

Source: Business Times –2 April 2013