Private property prices have increased 5.3 percent in the second quarter this year, setting an all-time high in the price index to 184.1, and beating the earlier record of 181.4 achieved in the second quarter of 1996.
In spite of the smaller quarter-on-quarter increase and the expected slower growth for the second half of this year, the private property price index will surpass the 190 mark by end–2010, said Mr. Mohamed Ismail, chief executive of PropNex.
On closer observation of the major geographical areas, properties located in the Outside Central Region saw the strongest growth, with a 5.7-percent increase, while those located in the Core Central Region and the Rest of Central Region recorded increases of 5.4 percent and 4.6 percent, respectively. Together with a 6.2-percent growth in landed property, down from 8.3 percent in Q1, this suggests a stabilizing private property market with a slight decline in the number of investors.
“The shift in focus to the mass market, as well as the overall slower growth can be attributed in part to the European sovereign debt crisis, which hit Greece in 1Q10 and subsequently impacted the rest of Europe and the world,” said Mr. Ismail. “This economic uncertainty and the rising prices of private property have led to the steadily declining number of private residential units sold in the last two months of 2Q10.”
Private properties in the first quarter went for a median sale price of $1,000 psf or more, falling from 71.6 percent in Q1 to 47.6 percent in Q2, he said. “Investor confidence has definitely been affected by the shaky global economy.”
“For example, the top three selling projects in June 2010, which altogether accounted for 40 percent of that month’s sales, all had a median sale price of below $1,000 psf,” he added.
Private property prices will likely further stabilise and grow by another 3 percent to 5 percent per quarter for the rest of the year.