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SINGAPORE: In data out on Friday, private home prices fell 4.7 per cent in the second quarter of this year, compared with the previous three months. This is the fourth straight quarter of falls, but it is much better than the record 14.1 per cent decline in the first quarter.
Homebuyers have been turning up in growing numbers at property launches and analysts said this is due to increasing optimism that the worst may be over for the economy.
Nicholas Mak, property analyst, said: "I think many market participants expect inflation to start creeping in over the next one to two years and real estate is seen as a good hedge for inflation."
While overall prices have fallen, market watchers said they expect a bottoming out soon, with a rebound in the second half of this year.
In all, 4,654 new homes were sold last quarter, compared to a total sale of 4,264 units in 2008. But the number of transactions appears to be moderating.
Mr Mak said: "Sales have been very encouraging, with developers selling over 4,000 private homes. Reason is pent-up demand. Going forward, this kind of numbers in each quarter is not really sustainable.
"We will probably go back to 2,000-plus private homes sold in each quarter, which is what the market can probably sustain in the medium term," said Mr Mak.
Market watchers see this as a bottom-up recovery, led by the mass market private condominium sector, with participation mainly by Singaporeans. However, they expect a shift to the mid- to high-end condominium sector, with greater participation by foreigners.
Meanwhile, HDB resale prices have bucked the trend of declines, with prices rising 1.4 per cent in the April to June period. The number of transactions crossed the 10,000 mark for the first time since the last quarter of 2004.
- CNA/so
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