NEW government figures released yesterday will bring cheer to the average Singaporean homeowner.
This is because prices for so-called ‘mass market’ properties - comprising mainly suburban condominiums and HDB homes - have posted their best quarterly growth in years.
This has brought the prices of both public and private homes to their highest level in a decade.
The flash estimates for the third quarter, which are based on home sales in July and August, show that private home prices rose 8 per cent, while prices of HDB homes jumped 6.5 per cent for the same period.
The numbers show that the effects of Singapore’s property recovery, which have been largely focused on high-end luxury apartments for the last year or so, are finally filtering down to the typical homeowner.
Most significantly, prices of non-landed private homes outside the central region - in areas such as Clementi and Bedok - surged 8.1 per cent, almost on par with the increase of 8.3 per cent for homes in the core, or central, area.
Growth in prices of homes located in prime areas like districts 9, 10, 11, downtown and Sentosa have far outstripped that of suburban homes since 2004, the earliest period for which price changes in different districts are available. But the gap in price increases has now narrowed to just 0.2 percentage points.
Property analysts say the figures show a confident local market generally unshaken by the recent volatility in the stock market - due to the sub-prime mortgage crisis in the US.
Savills Singapore’s director of marketing and business development Ku Swee Yong said future growth is now likely to be fuelled ‘from the bottom up’ by mass market homes.
CBRE Research’s executive director Li Hiaw Ho also marked this quarter as a ‘big step’ for suburban projects, which were launched at $850 to $1,000 psf.
Suburban projects were usually defined as those costing around $600 psf - but projects like The Parc Condominium in West Coast, for example, fully sold all 659 units in August at a median price of $880 psf, said Mr Li.
Meanwhile, HDB home prices are also driving the mass market recovery. The 6.5 per cent jump in prices is the highest since 1999, and comes on the back of a 3 per cent rise in the last quarter.
‘HDB home prices have languished in the doldrums for many years so it’s heartening for homeowners to see them pick up pace now,’ said property firm Propnex’s chief executive Mohamed Ismail.
The bullish figures have prompted some analysts to revise their forecasts. Property experts say private home prices have increased 21.1 per cent so far this year, already surpassing their forecasts of between 20 and 25 per cent.
Knight Frank’s director of research and consultancy Nicholas Mak gave a revised forecast of between 23 and 32 per cent.
As for HDB homes, Mr Mohamed expects the HDB price index to rise 15 per cent for the whole year.
Last year, in comparison, HDB’s price index only rose 2 per cent for the whole year, while for private homes, it was about 10 per cent.
The Government also highlighted that about 43,000 new private homes are expected to be completed from now till 2010, and almost half are still unsold.
Separately, the HDB also said it plans to launch up to 6,000 new homes in the next six months, subject to market demand.
The Urban Redevelopment Authority and HDB’s official third-quarter statistics will be released at the end of this month.