Prices of Singapore’s private residential properties rose 2.2 percent in the first quarter, down from 2.7 percent in the previous quarter, reflecting the accumulated effects of the cooling measures implemented by the government.

“The cooling measures announced by the Government were meant to encourage financial prudence and stamp out short-term speculative investing which would have unsustainably inflated private property prices,” said Mohamed Ismail, CEO of PropNex.

Prices of landed properties increased 3.9 percent in Q1 compared to 5.5 percent in the previous quarter, while prices of detached, semi-detached and terraced houses rose 4.1 percent, 2.8 percent and 3.9 percent respectively.

According to commercial property services firm CB Richard Ellis (CBRE), developers sold a total of 3,595 new homes in Q1, reflecting an increase for the fifth consecutive quarter since the beginning of 2010.

“The last time the market saw a similar phenomena was the four quarters from Q4 2006 to Q3 2007, with a total volume of 17,773 units sold,” it said.

“However, the momentum of sales in the secondary market has slowed down, as evidenced by a 24.6 percent fall in resale transactions to 3,191 units and a 25.5 percent fall in sub-sales volume to 550 units. The sales volume in Q1 2011 represents genuine demand from occupiers and investors.”

Meanwhile, prices of non-landed properties in the Core Central Region (CCR), Outside Central Region (OCR) and Rest of Central Region rose 1.1 percent, 3.1 percent and 2.0 percent respectively.

Mr. Ismail said “investors are also shying away from the CCR and looking to the OCR and RCR for their property investments, probably to reduce the loan quantum for their property investment.”

While the overall number of transactions islandwide dropped 20.4 percent quarter-on-quarter to 7,336 due to the continued rise in prices, the decline in the number of transactions for the mass market may have been attributed to the increase in psf prices.

Mr. Ismail noted that many potential buyers may have been put off by some of the high prices of mass market projects of late, a few of which breached the S$1,000 psf mark.

CBRE also said that with the growth forecast of between 4.0 and 6.0 percent for the economy remaining on track and the concurrent effectiveness of the property measures, “we expect the take-up of new homes in the second quarter to be around 3,000-3,500 units and home prices to remain at current levels.”

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