Non-landed private home prices climbed 2.6 percent in January, based on the monthly index compiled by the National University of Singapore (NUS).

According to the Singapore Residential Price Index (SRPI), the growth in home prices gained momentum in January. Prices surged one percent in December 2010 and stayed flat in the previous month.

For the full year 2010, the index jumped 11.9 percent.

The larger-than-usual growth in last month’s index surprised analysts, as the government had introduced more demand-side measures in the middle of January to cool the real estate market.

However, most of the increases could have been achieved in the two weeks prior to the implementation of the measures, said analysts.

Tan Tiong Cheng, Chairman of Knight Frank, said prices could have climbed prior to the January 13 announcement of the measures.

He added that the large number of small or shoebox units sold last month could have driven up the index, as such units sell for higher psf prices.

The NUS index shows that non-landed property prices climbed in both the central and non-central parts of Singapore last month.

Non-landed private home prices in the central region, covering districts 1 to 4 and 9 to 11, rose by 2.7 percent in January 2011, based on the sub-index for the central region.

Prices climbed by 2.5 percent in the non-central region.

Analysts and property developers said private home prices may see a decline this year, after the introduction of anti-speculation measures in January, though a sharp decline is unlikely.
Kwek Leng Beng, Executive Chairman of City Developments, said prices of private homes could decline by three to five percent in 2011, though they are unlikely to plummet.