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Stable household wealth behind property surge

Posted on 25 Aug 2009 | Comments Off

Consumer spending could also recover more quickly than in previous recessions

THE net worth of Singapore households has fallen only slightly from its peak last year and is still much higher than it was at the start of this decade, according to an analysis by a senior Citigroup economist.

This resilience in household wealth is one likely reason for property sales volumes and prices having rebounded strongly in recent weeks, and could mean that consumer spending here recovers more quickly than in previous recessions.

‘The strength of the household balance sheet probably explains to some extent the rally in asset prices, in particular housing, and may set the stage for a swifter recovery in domestic spending,’ Citi economist Kit Wei Zheng said in a report yesterday.

Mr Kit estimates that Singapore households had a combined net worth of just over $900 billion as at the second quarter of this year – down only Continue reading →

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Posted in Property Market / Real Estate

Tagged Household Wealth, Market Report, Singapore Property Market

Gap in prices between new and resale homes grows

Posted on 24 Aug 2009 | Comments Off

Homes in the primary market, or new ones sold by developers to owners, traditionally cost five to eight per cent more than those in the secondary or resale market. But this gap is growing to between 10 and 20 per cent as the Singapore property market heats up.

Developers have sold more than 10,000 new private homes to date in 2009, more than double the total in 2008.

And while sales in the secondary market have kept pace, analysts said prices have risen slower, which is characteristic of the segment.

Eugene Lim, associate director, ERA Asia Pacific, said: “The current market is on an upswing so we are looking at the price difference between old properties and new properties in a range of 10 to 20 per cent, versus a low market scenario where you see a difference of five to eight per cent.”

Locations where few new developments have been launched are likely to see the largest gaps between new and resale homes. Continue reading →