The flash estimates for 4Q09 released by URA and HDB are a portent of what can be expected of the property market in 2010: slow and steady growth.
HDB’s resale price index is expected to rise 3.8% to a new high of 150.7, on the fact that whilst many new BTOs have been launched, the immediate occupancy of resale flats has ensured a steady demand for them in 2009. The HDB resale price index went up by 8.0% for 2009, and PropNex CEO Mohamed Ismail expects to see further growth of 5–8% for 2010.
“URA’s price index is also showing signs of more sustainable growth,” observes Mr Ismail, referring to the 7.3% increase in the price index to 165.5. “This is still below the previous peak of 177.5 in 2Q08, although I am confident that we will achieve that record mark by the end of 2010.”
Mr Ismail forecasts an average growth of 3–4% per quarter in URA’s price index for 2010.
“The numbers show us that there is still a demand for property, with buyers exhibiting confidence that prices will continue to hold,” he says.
He expects the Core Central and Rest of Central regions, whose prices increased by 7.1% and 9.5% respectively compared to the Outside Central region’s 5.8%, to lead the upward trend in 2010.
“The reason the Outside Central region prices increased by 11.2% for 2009, while the Core Central and Rest of Central regions’ prices dropped by 2.0% and increased by 3.1% respectively, is because 2009 was a year for HDB upgraders to enter the mass market,” Mr Ismail explains. “In 2010, the demand from the upgraders has largely cooled off and, with more regulations in place, we are likely to see investors returning with confidence to pick up properties in the Core Central and Rest of Central regions at reasonable prices.
He concludes by revealing that prices in 2010 will also continue to rise due to more developers launching smaller units at higher PSF costs, especially from 2Q10 onwards.
For enquiries, please contact:
Mohamed Ismail (CEO) 9487 1414
Adam Tan (Corporate Communications Manager) 9006 8726