Singapore’s private home prices climbed 2.7% to a record in the fourth quarter as the nation’s fastest economic growth since independence helped counter government measures to cool the market.
The home-price index climbed to 194.8 points from 189.6 in the three months ended Sept. 30, the Urban Redevelopment Authority said in an e-mailed statement today. That’s the sixth quarter-on-quarter advance.
Singapore in August increased down payments for second mortgages and imposed a stamp duty on property held for less than three years to curb speculation. Housing sales increased as economic growth rebounded last quarter, capping the biggest annual increase since 1965.
“There’s also a lot of liquidity with low interest rates and the expectation that rates will remain low,” said Nicholas Mak, head of research at SLP International Property Consultants Pte in Singapore. “I don’t see any factors that will cause a U- turn in price trends.”
The gain in fourth-quarter home prices was the smallest in six quarters and the advance narrowed since the end of September 2009, government data showed.
“This should give comfort that the recent government property cooling measures, as well as the ramped-up state land supply, have worked to some extent to contain price growth,” Tay Huey Ying, research director at Colliers International in Singapore.
FURTHER PRICE GAINS
Mak, who forecasts prices may climb 10% to 15% in 2011, said he doesn’t expect more government measures as long as quarter-on-quarter increases are capped at 3%. Earlier measures were introduced after home prices climbed 11% in six months, translating to a full-year gain of 22%, he said, indicating an asset bubble.
Singapore was likely the world’s second-fastest growing economy in 2010 after a 14.7 annual expansion. Fourth-quarter gross domestic product rose an annualized 6.9% from the previous quarter, the trade ministry said in a statement today.
A measure tracking the nation’s property stocks climbed 1.2% to 738.01 at the close in Singapore, the highest since Nov. 12.
CB Richard Ellis said 15,500 to 16,000 new private homes were probably sold in 2010. That may fall to between 11,000 and 15,000 in 2011, according to the property brokerage, which estimates a 3% to 5% rise in prices this year.
Singapore’s three-month interbank rate, which fell to 0.43751% on Oct. 28, today again reached that level, the lowest since Bloomberg began compiling the data in 1999. The central bank predicted inflation will average between 2% and 3% this year, prompting some investors to buy real estate to hedge against consumer price increases, Mak said.
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