Singapore property

The Shin Min Daily newspaper reported that despite the recent boom in the property sector, some older condominiums – more than 10 years old in most cases – are priced about 20 per cent cheaper than newly built ones. Many of these were built and purchased around 1996 when property prices were at their height, and some are now on sale at below their 1996 price tags.

Property agents told the newspaper that for about 20 per cent of the houses that were built in that period, the resale price is still lower than what the owners paid in 1996/7 – even for those in good locations and close to transport links and local amenities.

One of these under-valued condominiums, the newspaper highlighted, is Bishan 8. Attracting long queues of interested buyers when it debuted in 1997, units were priced at around S$1,100 (US$800) per sq ft. In June, one of the units was sold for S$912 (S$663) per sq ft. For an average sized unit the owner would be realising a loss of about S$220,000 (US$160,000)

PropNex Chief Executive Officer Mohd Ismail told the newspaper that with new developments being pushed out all the time, home buyers have more than enough choice and many prefer the new apartments, while Ngee Ann Polytechnic real estate lecturer Nicholas Mak felt that buyers may find the older condominium’s design and facilities outdated.

SOURCE: Property-Report.com

Singapore real estate

Li Hiaw Ho, Executive Director of CB Richard Ellis Research, said: “The momentum of new home sales slowed in June as expected. Developers sold only 847 units, compared to 1,083 units and 2,208 units in May and April respectively. This translates to a total of 4,138 new homes sold in the entire second quarter of 2010, 5.5 per cent fewer than the 4,380 units sold in the previous quarter. In total, 8,518 new homes have been sold in the first six months of the year, averaging 1,420 units per month. In comparison, the average monthly sales volume in 2009 was 1,224 units.”

Dr Chua Yang Liang, Head of Research South East Asia at Jones Lang LaSalle, added: “While transaction volume has declined, prices are likely to hold up. As the previous period of capital appreciation has already over capitalised the market’s worth, we can expect a more moderate buying mood backed by conservative global economic conditions and hence a continual slow down in capital values growth.”

Jones Lang LaSalle noted a total of 429 units, or about 51 per cent of June’s sales volume, were located in Outside Central Region (OCR). The Rest of Central Region (RCR) recorded 275 units sold (32 per cent) while only 123 units (17 per cent) of the units were located in the Core Central Region (CCR).

The Minton at Lorong Ah Soo, a 99-year leasehold condominium which was launched in May, continued to sell well with 173 units sold in June at the median price of S$871 (US$634) per sq ft. This is higher than the median price of S$849 (US$618) per sq ft for first 204 units which were sold in May.

Waterfront Gold at Bedok Reservoir Road was launched in June and 77 units were sold at the median price of S$996 (US$725) per sq ft. This price is about 10 per cent higher than its neighbouring project, Waterfront Keys, attributable to its relatively better view of the Bedok Rservoir.

La Brisa at Lorong 28 Geylang reported 82 sales out of a total of 84 units, at the median price of S$960 (US$698) per sq ft. The strengths of this project lie in its proximity to Aljunied MRT station and affordable price quantum due to the small-format units offered. Most of the units ranged from 409 sq ft to 689 sq ft.

Although the volume of luxury units sold above S$2,500 (US$1,820) per sq ft remained thin, the price points reached in June were higher than those in May. For example, in June, the highest price point of S$4,120 (US$2,999) per sq ft was achieved by a unit in Nassim Park Residences, followed by a unit in Skyline@Orchard Boulevard which was sold at S$3,901 (US$2,829) per sq ft. In May, the highest price point of S$3,641 (US$2,650) per sq ft was achieved by a unit in Orchard View.

The third quarter has started well with the strong sales seen at 368 Thomson and Terrene. Market sentiment could be improving with the latest government’s upward revision of GDP estimates for 2010 to 13 per cent to 15 per cent, from 7 per cent to 9 per cent previously, due to a stronger than expected economic growth in the second quarter. However, buying interest will remain selective, depending on the location and product attributes as well as price points of new launches.

“The private home market is definitely stabilizing,” says PropNex Chief Executive Officer Mohamed Ismail. “The 6,640 units sold in the first four months of 2010 was a figure that was simply not sustainable, and the latest figures equate to a movement towards equilibrium of about 1,000 units on average per month.” Ismail noted that the market stability is also indicated by the fact that the three top-selling projects in June all posted median transaction prices of below S$1,000 (US$728) per sq ft.

“The comparatively brisk sales at the three projects, La Brisa, Waterfront Gold and The Minton, are signs that the consumers are feeling the effects of the rising private property prices and are looking to mass market projects that are more budget-friendly,” said Ismail, referring to URA’s price index flash estimate of 184.1, an all-time record high.

Continuing this trend, he expects an average of about 900 to 1,000 units sold per month for the rest of 2010.

Also looking ahead is Tay Huey Ying, Director for Research and Advisory at Colliers International.

She said: “The end of the World Cup season and June school holiday will likely see buyers returning to the market, and the upgrade of Singapore’s 2010 GDP growth by the MTI yesterday to between 13 per cent and 15 per cent will likely work to boost buyers’ confidence. In addition, the impending lunar seventh month, which will commence some time in the second week of August, could also see superstitious buyers looking to pick up homes in July ahead of the inauspicious home-buying period.”

Private residential property prices rose 5.2 percent in the April-to-June period to the highest level since the government began the index in 1975, the Urban Redevelopment Authority said Thursday.

Prices leapt 5.6 percent in the first quarter and 7.4 percent in the fourth, bouncing back strongly after diving 25 percent in the 12 months to mid-2009.

Singapore’s low crime rate, good schools and low personal and corporate taxes have helped the island rank near the top of expatriate global quality-of-life surveys and attracted investors to the residential and office property markets. Singapore opened its first two casino-resorts this year, boosting tourist visits.

Singapore has sought to slow price gains by implementing a series of measures this year to discourage short-term speculative investment in property.

The government earlier this year imposed a 1 percent to 3 percent tax on residential properties sold within one year of purchase and lowered the loan-to-value limit to 80 percent from 90 percent on loans for private housing. Officials have also pledged to release more government land this year for real estate development to help boost housing supply.

Policymakers throughout Asia have grappled with balancing low interest rates to spur economic growth and the danger that cheap credit can fuel asset bubbles.

Investor confidence in Singapore has been bolstered by a soaring economy in the first half, led by a surge in manufacturing. Gross domestic product grew a record 15.5 percent in the first quarter from a year earlier, and DBS Bank said it expects a 16 percent expansion in the second quarter.

DBS raised its 2010 growth forecast Wednesday to 13 percent from 10.3 percent and expects the manufacturing sector to grew 50 percent in the second quarter.

Singapore property prices

The Urban Redevelopment Authority said Thursday that private residential property prices rose 5.2 percent in the April-to-June period, the highest since at least 1993. Prices leapt 5.6 percent in the first quarter and 7.4 percent in the fourth, bouncing back strongly after diving 25 percent in the 12 months to mid-2009.

Singapore’s low crime rate, good schools and low personal and corporate taxes have helped the island rank near the top of expatriate global quality-of-life surveys and attract investors to the residential and office property markets. Singapore opened its first two casino-resorts this year, boosting tourist visits.

SINGAPORE: Increases in private home prices are expected to slow down in the second quarter after climbing 5.6 percent in the first quarter.

Colliers International said suburban homes could cost 2 to 3 percent more on average for the next two quarters.

Prices of suburban homes have already surpassed the peak by about 10 percent.

Meanwhile prices in the luxury segment have been projected to grow by up to 20 percent for the whole of 2010.

High-end homes are now just 8 percent off the record prices set in 2008.

And with the softening in price increases, analysts do not expect the government to roll out more measures to cool the property market.

Still, they believe high-end home prices could continue to push upwards, supported by foreign demand.

Properties in Sentosa Cove are among the priciest on the market. But many foreign buyers are still snapping them up, with a unit there being sold to a Chinese national for S$36 million.

With cooling measures implemented in several Asian cities, observers said more foreigners will dip into the Singapore property market.

Colliers International’s director (Research & Advisory), Tay Huey Ying, said: “Foreign buyers are certainly on the comeback. For the first five months alone, based on the caveats lodged, the number of foreign purchasers has already exceeded 55% of what we saw for the whole of last year.

“With the recovery of the economy gaining traction, we expect to see more of them coming into Singapore, especially given the cooling measures that the governments of Asian cities have put in place for their respective markets.

“We see some of those interest flowing into Singapore, and of course the appreciation of the renminbi will also contribute to the growing foreign buying population in the second half of the year.”

Property consultancy CB Richard Ellis estimates that some 4,000 new homes have been sold in the second quarter. That brings the first-half sales figure to 8,300 units, about 57 percent of new homes sold last year.

For the second half of 2010, market watchers expect 1,000 new units to change hands each month.

Despite the drop in sales volume, they said the strong numbers from the first five months of the year will ensure total sales for 2010 keep up with the transactions recorded in 2009.

Colliers International added that there will be fewer property launches as developers are running low on launch ready projects, especially in the mass market segment.

With signs of a slowdown in the property market, some analysts said that the government is unlikely to introduce more anti-speculative measures, unless prices rise sharply.

Chesterton Suntec International’s director and head for research and consultancy, Colin Tan, said: “It all depends on what’s the official price increase in the 2nd quarter. If it’s more than 5%, it’s likely that we may see more cooling measures….(one) of these measures could be lowering the
loan-to-value ratio from 80% to 75% or 70%.”

The Urban Redevelopment Authority (URA) is expected to release the data for Q2 on Thursday.

SOURCE: Channel NewsAsia

Prices rising?

Prices of luxury property are set to rise 5 to 8 per cent in the coming months, given Singapore’s solid economic fundamentals, strong cash holdings by Singaporeans and low interest rates, said a strategist at Swiss bank UBS on Wednesday.

Mr Kelvin Tay, chief investment strategist at UBS Wealth Management Singapore, said that while prices of mid-range and lower-end real estate could hold at current levels for at least the next 12 months, prices of high-end homes could yet see more upsides.

‘Luxury properties such as those at Sentosa, Nassim Road and Ardmore Park, where condominiums go for above $3,000 per sq ft (psf), could see further upsides. From now till the end of the year, a 5 to 8 per cent price appreciation is not difficult,’ he said.

Mr Tay added: ‘The lower luxury segment, at districts 9, 10 and 11, might see some positive flows because of the luxury end moving up but I think that will be muted.’

The luxury-end is ‘not a sector that the Government is keen to control’, said Mr Tay, adding that the rest of the market is likely to be flat.

Flash estimates from the National University of Singapore released in late May showed that its price index for non-landed private homes rose 2.5 per cent in April over the previous month, reflecting an increase of about 6 per cent since the end of last year.

In the latest tender results for state land, the number of bidders and offered bid prices escalated to all-time highs, creating a bleak gap between the bids of smaller firms and big players.

For instance, invest-Ho properties, a boutique Property developer, had submitted a bid of $9.1 million for a site at Tampines Road but lost out to the highest bid of $16.25 million by Fragrance properties.

According to Mr. Edwin Ho, manager of invest-Ho properties Group, it was the group’s first time to bid for a site under the Government Land sales (GLS) Programme, as Buying private land and Freehold land has become more expensive.

Small Property developers are also affected by the entry of overseas developers planning to expand in the country – driving land prices even higher.

“With the current Chinese tightening measures, some Chinese developers are moving to familiar overseas markets to capitalise on their reserves of cash,” said Mr. Colin Tan, research and consultancy director of Chesterton Suntec International.

Analysts said that the industry could see a major shake-up, which could force small developers to look elsewhere for business opportunities if this trend continues.

Mr. Nicholas Mak, a Property lecturer from Ngee Ann Polytechnic, said: “It’s a little difficult for them to go for En bloc (sales) because some of the prices are very high. As a result, they will turn to Land sales – and if the Government does not sell enough of such land, it will affect their businesses.”

Owner expectations from En bloc sales also pose a challenge for small developers, said Mr. Joseph Tan, executive director of real estate consultancy firm CBRE. “The gestation period is longer and by the time the land is available, the market and pricing may have changed,” he said.

However, while small and medium developers may find options with GLS land parcels, the supply of such lands that may be “palatable” to them are limited, said Mr. Mak.

Besides forging joint ventures, several small Property developers are considering acquiring land overseas, as market watchers say that the situation could go even grim for them.

“But the road will hardly be a smooth one even with such alternatives as joint ventures requiring competitors to work together will be difficult for smaller companies run by families or centered on personalities,” said Mr. Colin Tan.

As for foreign markets, he said that smaller developers face the risks of inexperience and unfamiliarity.

For some, they would opt to wait on the sidelines and rely on other means to generate business.

Mr. Teo Tiow Guan, director of Vigcon Construction, which lost its bid of about $9.9 million for a site in Tampines Road site, said that as Property development is not its core business, the firm can afford to wait for plots that could be available and are within their means.

SOURCE: Propertyguru.com

Online, netizens griped about property being priced out of their reach. In Parliament, MPs asked if the Government could do more to help home seekers.

Singapore’s ongoing property boom appears to be downright unpopular – and not just among those yet to buy their homes. Why might that be so? After all, as the theory goes, higher prices benefit not only home sellers making a profit, but every home owner whose property is appreciating in value.

In Singapore, land of the highest home ownership rate in the world, this should mean that apart from a small group of home seekers being priced out of the market, the large majority of the population gains whenever home values go up.

Property developers have also always maintained that some level of froth is good for the property market. The president of the Real Estate Developers’ Association of Singapore (Redas), Mr Simon Cheong, has said that speculation is unavoidable and not all bad.

‘In any market…there is always the element of speculation, which I think is healthy,’ he said in an interview in 2007.

The executive director of Hong Kong’s Cheung Kong Holdings, Mr Justin Chiu, told reporters here in March that he likes property bubbles as they draw in more buyers and make the market more active.

But is it really true that rising home prices present more pros than cons for the majority? The short answer: Not if prices are surging sharply, and not if a significant proportion of home owners are aspiring to upgrade.

To be sure, a housing boom is incontestably better for home owners than a slump. When home prices plunge by so much that your property is worth less than the loan you took to pay it, you basically cannot afford to sell it even if you really need to.

But this does not mean that all home owners can afford to sell their houses in a boom either. Those with only one home can afford to sell only if they are willing to downgrade to a cheaper property, or move further from the city centre. Otherwise, whatever profit they get from selling in a high market will be wiped out from buying just as high, if not higher.

Suburban homes have an implied price cap as their main target market is Housing Board flat upgraders and first-time home buyers. But high-end homes in the prime areas have less of a limit, thanks largely to the well-heeled foreigners now firmly entrenched in the property scene.

All things being equal, this means that if your Upper Bukit Timah condominium rises in price by 10 per cent, chances are that condo prices in the posher Bukit Timah area will go up by 20 per cent, putting a spanner in the hopes of upgraders.

Today’s home owners also worry about tomorrow’s prices: They fear that if property values rise unceasingly, their children will never be able to afford a home.

So, who benefits from a runaway housing market? Investors clearly do: Those who own more than one home and can cash out. Higher home prices also usually mean higher rentals, so investors seeking rental yields love booms.

Also in this category are the property traders and speculators – those who have bet that prices will go up.

But because there are no publicly available figures on how many Singapore residents own more than one home, it is hard to gauge how dominant this group is.

Developers are also an obvious beneficiary of a boom. But to the extent that a sudden spike in home prices could trigger cooling measures by the Government, steeply rising prices may also portend uncertainty and instability in the real estate sector, making it less attractive to investors and property developers.

Of course, the Government itself gains when property values soar, from higher stamp duty and property tax collections, which are based on property values. When luxury home prices hit one high after another in 2007, stamp duty takings reached a record $3.8 billion.

Another advantage of a property boom is the impact on the wider economy. A rising housing market lifts the real estate and business services sectors. High prices also send a signal that a country’s property sector is desirable, speaking well of its fundamentals and growth prospects.

It is no coincidence that property prices are highly correlated with gross domestic product. In rankings of cities with the highest home prices, thriving financial centres such as London, New York and Tokyo often dominate.

High home prices also have an indirect effect on the economy. Just sitting on a quickly appreciating asset makes people feel more secure about their finances and more willing to spend.

This so-called wealth effect should be magnified in a country like Singapore, where 90 per cent of the population own their homes. But a 2004 study by two National University of Singapore professors questioned this assumption, and instead found that the wealth effect is ‘very much absent’ in Singapore.

A key reason could be because Singapore, as both a city and a country, offers few options for home owners to realise their higher wealth by cashing out of their city homes and moving to cheaper quality homes in the suburbs, said Professors Tilak Abeysinghe and Choy Keen Meng.

There is also a lack of financial instruments such as reverse mortgages that allow home owners to convert the savings locked up in their houses to consumption of non-housing goods and services.

The professors argued that sharp escalations in house prices should be avoided here as, far from creating a wealth effect, they produce a negative ‘price effect’: As people anticipate further rises in home prices, they cut back on spending.

Rising home prices also increase the financial burdens of Singaporeans in the form of higher downpayments and monthly instalments, they said.

So, while high property prices benefit many, the truth is that a market that is too buoyant can create the opposite effect and cause anxiety even among home owners. This may be mere perception, but helps explain why the current unhappiness over high prices seems to extend beyond first-time home buyers.

The upshot of all this is that while falling home prices claim the most casualties, steeply rising prices can hurt as well.

Ultimately, home prices should be viewed like inflation: Best when rising at a slow and steady rate.

Property traders, speculators, developers and all those pushing the boundaries with significant price hikes would do well to keep that in mind.

This article was first published in The Straits Times.

Yesterday, the Urban Redevelopment Authority released some detailed data for the property market in the first quarter. I’ve decided to update some of the charts and analysis that I’ve done before with the latest set of data.

The first chart plots the growth of Singapore’s gross domestic product (GDP), the URA private property price index and the Straits Times Index since 1975. In that 35 years, the stock market and the property market more or less tracked the growth of the economy. But there were bouts of over exuberance and excessive depression for the property and the stock markets. In that short history, the property market has shown itself to be more prone to over exuberance or the formation of so-called bubbles, though the stock market too has had its fair share of both irrational exuberance and pessimism.

The Singapore property market started to race ahead of the underlying economy in 1994 and 1995, and peaked in 1996. That huge deviation proved to be a bubble. The bubble was pricked by the government’s anti-speculative measures, and later by the Asian financial crisis. Property prices then corrected severely and closed the gap with the domestic economy. In 2007, property prices started to climb again. The correction came soon after in 2008, but it now appears that could just have been a blip. Prices have again resumed their north-ward march, and properties are now at their highest level relative to the GDP since 1999. The years of 1994, 1995, 1996 and 1997 of course saw significantly higher property prices relative to the GDP.

But a few things are different this time round, primarily the low interest rates that we all enjoy today.

Chart 2 plots the one-year interbank rate against the rental yield. Here, you can see that there remains a relatively big buffer between the interest rate and the rental yield of a private non-landed property. The rental yield is calculated based on the median rental of a non-landed private property over its median price.

And as a result of the very low interest rates today, an investor who takes up an 80 per cent loan to be paid off over 30 years can entirely service his or her monthly mortgage payment from the rental income. Here, the mortgage rate is calculated based on the one-year interbank rate plus 1.5 percentage points.

Based on URA’s numbers, the median price of an apartment in the first quarter of 2010 was $9,952 per sq metre (psm), and for condominiums, $10,490 psm. Let’s take the average of the two to represent the median price of a non-landed property. That works out to $10,221 psm. A 100 sq metre unit would cost some $1.02 million. Assume that an 80 per cent loan is taken and that the housing loan rate is 1.5 percentage points above the interbank rate, which was at 0.625 per cent. For a $818,000 loan on a 2.125 per cent interest over 30 years, the monthly mortgage payment is $3,074.

On the rental side, the median for a non-landed private property is $34.06 psm per month. So the rental income from a 100 sq metre unit would be $3,406. That more than covers the mortgage payment. However, additional expenses relating to owning a property like property tax or property maintenance are not taken into consideration.

There was negative cash flow for property investors between Q2 2005 and Q1 2008. Since Q2 2008, however, there has been a positive cash flow. Indeed the positive cash flow could have been bigger for those who had opted for floating rate housing loans. They are in fact paying much lower rates than 2.125 per cent.

Such a situation would last for only as long as rentals stay firm and interest rates remain low. But rates are at their lowest in the last 20 years. The median level of interbank rate in the last 20 years was 2.7 per cent. Based on current rentals, the interbank rate has to go up only by less than one percentage point to 1.5 per cent for cash flow to turn negative for property investors. Unless one is of the view that the low interest rates today is the ‘new normal’, it is logical to assume that interest rates will rise to more ‘normal’ levels sooner or later. For perspective, the median interbank rate in the last 10 years is 1.375 per cent.

The current low bank rates also means that the rental return on equity (ROE) for a property investor is high, at 9.5 per cent. Here, the rental is reduced by 10 per cent to factor in property tax and some of the other expenses. It however does not take into consideration potential capital appreciation. Again, the assumption is 80 per cent loan at a rate of 1.5 percentage points above the interbank rate. A rise in interbank rate to 1.5 per cent would reduce the ROE to 6 per cent, while an interbank rate of 2 per cent would slash the return to 4 per cent.

On the affordability front, the numbers continue to look reasonable. I take the average income of the 71st to 80th percentile households in Singapore. According to the Department of Statistics, the average monthly income for this group was $8,010 in 2006, $8,730 in 2007, $9,720 in 2008 and $9,559 in 2009. I then compare these to the median price of condominiums in those four years.

Again, assume the condo is 100 sq m, the loan is 80 per cent over 30 years, and the rate is 1.5 percentage points above the one-year interbank rate. In the above scenario, the mortgage payments these households need to fork out has fallen to 29 per cent, well within the recommended range of how much each household should set aside for mortgage payments.

So, the above analysis shows that one, the top 30 per cent of Singapore households can still comfortably afford a non-landed private property. Two, from an investment point of view, property remains attractive for as long as interest rates remain low, rentals holding firm, and capital value being maintained.

There is only a small buffer for interest rates to go up before properties become unattractive as a rental yielding asset. Meanwhile, rentals are not expected to chalk up significant gains. Not helping matters are the substantial number of new stock coming onto the market in the next few years.

But what is unknown is the demand. Singapore’s status as a happening and safe hub city in Asia is gaining traction. Given the small size of the city, a small increase in demand can translate into big price movements. No one can tell how the market will look like in the future. But for as long as one can afford to own a property with an ample margin of safety, it remains one of the best places to park one’s money in, over the long term.

This article was first published in The Business Times.

Some analysts expect demand to continue to rise in the next few months but said cash premiums are unlikely to go much higher than the current median of S$25,000.

The official figures confirm estimates released earlier this month.

Resale transactions have dipped by about five per cent while median cash premiums, or COVs, have risen at a much slower pace than in previous quarters.

They went up S$1,000 in the last three months compared to the jump of S$12,000 between the third and fourth quarters last year.

They now stand at S$25,000, with flats in Bishan fetching the highest COVs, of about S$32,000.

Strong demand for newer estates has also translated into high premiums.

Towns like Punggol and Sengkang are seeing premiums of about S$30,000.

Eugene Lim, associate director, ERA Asia Pacific, said: “If you compare Punggol, Sengkang prices vis-a-vis mature HDB estates, they are still cheaper. Even though with high COVs of around S$30,000, you find that S$30,000 actually is the average COV nowadays for most flats. So, if you’re paying thereabouts, why not get something newer versus something older?”

Analysts said measures to cool the market have worked including the launch of more HDB projects.

Other measures include restricting the cash portion of the second concessionary home loan, channeling the loan through the buyer’s CPF account.

Moving forward, ERA’a Eugene Lim said the government may consider further measures to ease demand.

And while some observers say possible interest rate increases later this year will hit buyers’ pockets, others disagree.

Jeffrey Hong, executive director, HSR International Realtors, said: “In general they don’t look at, ‘At the end of 30 years of loan, how much do I actually pay for my flat?’ The first-time buyers are more concerned about how much they pay on a monthly basis. So if the increase in the interest is not much, the increment of the monthly payment is probably S$20 to S$50 a month more.”

In the rental market, demand between January and March increased sharply, with transactions up 69 per cent over the previous quarter.

The HDB said subletting transactions went up from 3,902 in the last three months of 2009, to 6,606 cases.

Analysts said this is partly driven by foreigners returning to Singapore to work as the economy improves.

However, rents remain relatively stable, with median prices for four- and five-room flats hovering just under S$2,000 a month.

Analysts said this is partly driven by foreigners returning to Singapore to work as the economy improves while the HDB said the spike is also due to an increase in renewals of rental flats.

In the last three months, 2,323 flatowners applied to continue renting their flats, 19 per cent more than the previous quarter.

The HDB added that more homeowners are also aware that they have to apply to the HDB for approval which could add to the increase.

However, rents remain relatively stable with median prices for four- and five-room flats hovering just under S$2,000 a month.

ERA’s Eugene Lim said strong demand will not likely translate into escalating rents because the supply of flats that can be subletted is high.

Under HDB rules, flats can be sublet after a minimum of three years.

But analysts said there is no similar jump in demand in the private rental market, suggesting that rental budgets remain low.

In the private residential market, prices were up 5.6 per cent, marginally higher than the 5.1 percent hike initially estimated.

Source:Channel News Asia