Prices of private homes across all sectors may possibly rise this year, but the high-end properties will remain in stagnancy until next year, said Kwek Leng Beng, the executive chairman of Hong Leong Group.
Based on the Urban Redevelopment Authority data there were about 1,200 new private houses sold in April. This was the third time that housing sales have surpassed 1,000-unit mark. The sales figures are almost on par with those of the boom period in 2007. Some analysts are sceptical of the sustainability of the current demand. But Dr. Kwek believed that the real estate boom is quite sustainable once the world economy stabilises. He added that the prices of high-end homes would rally more slowly since this sector is mostly driven by the demand of foreigners who are unlikely to settle in Singapore until the economic situation improves.
The willingness of real estate developers to slash their prices to attract buyers has proven to be an effective sales stimulus amid recession. Developers were forced to ease their asking prices as sales hit rock bottom at 100 units in January.
High sales got two foreign investment firms to upgrade their outlook on Singapore’s property market. Seeing that the sales were higher than expected, UBS Investment Bank now thinks that prices may go higher in the second half of the year. The company has also issued a buy recommendation in April, believing that it is the strong demand from domestic upgraders – and not from foreign buyers – that would propel recovery. Goldman Sachs is also optimistic of Singapore’s real estate market, predicting a five percent increase in private home prices in 2010.