Thursday, July 05, 2007

Singapore Homes Sky-Rocket, But Is the Price Getting Too High?

The price of private homes in Singapore rose to the highest in almost 10 years in the second quarter of this year as the city’s current economic expansion has allowed developers to sell apartments at record prices.

By June, residential property had risen in price by 7.9 percent to 147.3 points in just three months, the Urban Redevelopment Agency revealed in a statement on July 2nd. This rise is recorded the fastest in almost eight years and the highest level seen since the fourth quarter of 1997.

Director of Savills Singapore, Ku Swee Yong said “Based on some of the funds we are bringing and the deals we are seeing, Singapore’s attractiveness has increased tremendously.” He continued to add that “there’s a lot of wealth growth and a very important indicator is the confidence going forward.”

Singapore’s economy is enjoying its longest expansion since 1994, which is allowing developers to sell apartments at very high prices. At the end of June ‘The Marq’ apartments, by SC Global Development, sold for an astonishing $5,100 (US$3,327) per square foot. Moreover, Citigroup Global Markets commented that home prices in the city could rise as much as 25 percent this year.

At the end of last year, Swee Yong forecast that home prices may rise up to 20 percent in 2007. He may now have to revise his estimate.
Figures released by the Urban Redevelopment Authority are only preliminary and are based on transaction prices recorded during the first 10 weeks of the quarter. They followed that the statistics are to be updated four weeks later; however the first measure increased 4.8 percent.