Mass market home prices closing in on city homes

Mass market home prices closing in on city homes

The gap in prices between private homes in the mass market and the core central region is narrowing. Market watchers said the gap is down substantially to just above 60 per cent in the first quarter of this year.

That’s compared to 108 per cent in the second quarter of 2011.

This is because prices of homes in the mass market have been picking up at a much faster pace.

Analysts expect more than 6,000 new private homes to be sold in the first quarter of this year, mostly in the mass market segment.

In the second quarter of 2011, the median price of homes in the city was about S$1,850 per square foot, while mass market homes went for some S$895 per square foot.

But now, mass market home prices have climbed to about S$1,000 per square foot, with those in the city falling to about S$1,660 per square foot.

Long-term sustainable level is about 50-60 per cent gap in the two markets, the price will have to slow down as buyers moved out from the mass market into the high end.

Analysts said the strength of home prices in the mass market segment is largely supported by the healthy growth in resale prices of public housing flats. HDB resale prices have risen by over 80 per cent in the last few years, but analysts expect them to soften in the next two to three quarters.

Source : Channel NewsAsia – 11 Apr 2012