The private residential property market continued its recovery in 4Q09 with a 7.4% increase in its price index to 165.7, just 11.8 points shy of the previous peak in 2Q08 of 177.5.
“We are seeing signs of stability and the potential for sustained growth,” says PropNex CEO Mr Mohamed Ismail, recalling his earlier comments that the price index’s sudden and sharp recovery in 3Q09, with a 15.8% increase over 2Q09, was unlikely to continue at that rate.
“The bullish showing in 2009, especially for mass market projects, has cooled down, now that the demand for such properties, mainly by HDB upgraders, has largely been sated,” he says. “This is evident in the fact that the prices in the Outside Central region, where the mass market projects are located, only increased by 6.3%. In addition, there were fewer mass market launches in the last quarter of 2009, unlike the middle of the year when hundreds of units would be launched in each project per month.”
He contrasts this with the Core Central and Rest of Central regions, whose prices showed greater increases of 7.3% and 9.5% in 4Q09 respectively.
“The Outside Central region prices increased by 11.8% for 2009 as a whole, while the Core Central and Rest of Central regions’ prices dropped by 1.8% and increased by 3.0% respectively, because 2009 saw many HDB upgraders entering the mass market,” Mr Ismail explains. “In 2010, we are more likely to see investors returning with confidence to pick up properties in the Core Central and Rest of Central regions at reasonable prices.
He cites The Shore Residences at Amber Road (median sale price of $1,144psf), Parvis at Holland Hill (median sale price of $1,495psf) and Espada at St. Thomas Road (median sale price of $2,337psf) as examples of such properties.
“The latest figures show us that there is still a demand for property,” observes Mr Ismail, “with buyers exhibiting confidence that prices will continue to hold. In fact, I expect the Core Central and Rest of Central regions to lead the private property growth in 2010.”
Mr Ismail forecasts an average growth of 3–4% per quarter in URA’s price index for 2010, with overall growths of 5–8% for the Outside Central region, 8–10% for the Rest of Central region and 12–18% for the Core Central region.
He concludes by explaining 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