Prices of non-landed private homes outside Singapore’s prime districts are now growing at a faster rate than prices in the prime districts, according to a new index compiled by the National University of Singapore (NUS).
Flash estimates for March released yesterday show that ‘non-central’ home prices climbed 1.2 per cent last month, taking the first-quarter rise to 4.4 per cent.
In contrast, prices in the central region – postal districts 1-4 and 9-11 – dipped 0.07 per cent in March. For Q1, they rose 1.7 per cent.
NUS’s Singapore Residential Price Index also shows that overall home prices rose 0.3 per cent last month and 2.8 per cent in Q1.
This puts the overall current value of the index just 0.1 per cent below the peak in November 2007. Prices in the central region are now 9.3 per cent below that peak, while prices in non-central areas are 6.4 per cent above the previous peak in January 2008.
‘The rate of price growth in the central area has slowed, but for the non-central region, we have not seen an obvious decline in the rate of growth yet,’ said Associate Professor Lum Sau Kim, who leads the group that compiles the index.
In 2009, price growth in the central region outpaced that in non-central areas. Home prices grew 27.3 per cent in the central region and 19.5 per cent in non-central areas. The overall index rose 22.2 per cent.
Analysts say that the moderation in the growth of prices – seen in both the NUS index and official Urban Redevelopment Authority index – is a sign that government measures to cool the market, implemented in September 2009 and February 2010, have reined in runaway price increases.
Official data released by URA last week showed that prices of non-landed properties increased 4.9 per cent in Q1, down from 7.2 per cent in the preceding quarter.
URA’s index also showed that prices in the ‘core central region’, which roughly correlates to the central region classification used by the NUS index, rose 4.4 per cent in Q1 – faster than home prices in the ‘outside central region’, which rose 4.3 per cent.
URA’s index showed that prices in the mid-level ‘rest of central region’ rose 7.9 per cent in Q1.
The numbers from URA and NUS differ because the two indices use different methods to track prices.
NUS’s index, which is compiled by the Institute of Real Estate Studies, was launched in March to serve as a resource for developing property derivatives in Singapore.
It is computed using the market values of a basket of completed properties. Uncompleted projects are not included in the basket as price movements for such projects can be different from those in the rest of the market.
But the impact of new launches on the prices of completed properties in the vicinity is factored in.
The URA index, on the other hand, includes transactions at new launches and sub-sales. The differences mean that the two indices can throw up different numbers, market watchers have said-Asiaonenews