Monday, February 28, 2011

Singapore property prices are up in January 2011

Prices of non-landed private home prices continued to climb in the first month of 2011 according to NUS Singapore Residential Price Index. The prices are up on average 2.6% in January 2011 month-on-month and the central region sub-index recorded a 2.7% rise. This is a rebound on a 0.8% decline in December 2010. Non-central region sub-index rose 2.5%. All this was despite the cooling measures introduced in mid January 2011.

Analyst in Singapore believe that the demand is coming from genuine home buyers while speculators are wiped out of the market by January 2011 property cooling measures. But it is also still early to talk about the effects of these cooling measures since the measures are introduced on Jan 14th 2011 and they were suprise for the industry. January data has half month brisk sales of pre-cooling measures sales and the real effects of the measures will probably seen end next month when February 2011 price data is compiled.

Still it looks like low interest rates and strong economic growth are pushing prices up. This can be seen in recent home loan figures released by MAS. Mortgage numbers grew 1.6% in January 2011.

There is now also another support for demand in the coming months: inflation. Inflation is a cash melter and most of the Asian rich hold a significantly large amount of money as cash. These people will be forced to direct their cash to non-cash investments since with an expected 5% inflation rate in Singapore for 2011, every 1 million held as cash will lose 50K in a single year! Combine this fact with Asian obsession with property and suspicion to stocks and other investments, it is not hard to predict that cash will flow into property market during 2011.

Filppers are out of the market by the last cooling measures but there are still geniune demand out there supported by low interest rates, high growth, increased job prospects and now inflation.

Related Articles:

Singapore private property sales February 2011 - impact of cooling measures

This blog article is to provide general information only and should not be treated as an invitation to buy or sell any property or as sales material.  Users of this report should consider this report as a one of the many factors in making their investment decision. Users should make reference to other sources of information and specific investment advice to obtain a more objective view of the property market. Asia Singapore shall not be responsible for losses suffered.

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