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Property prices keep rising in Singapore and now set to see a 22% increase by end of 2010

Residential properties prices increased to 175 points for the first quarter of this year, around 5.6% higher than the previous quarter, according to the statistics released by the Urban Redevelopment Authority (URA).
This comes on top of a 7.4% increase in the final quarter of 2009 which was judged by analysts to be too high and unsustainable and resulted in a number of measures to try to cool the market amid fears of overheating.
Although the price increases for the first three months of 2010 are showing signs of slowing fears about a real estate bubble persist. ‘Although the price increase has dropped to 5.6% this first quarter, it is still of the higher range’, said Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic.
He said that if this trend continued, by the end of the year the market could have seen a 22% jump in private home prices, reaching the peak level of 2008.
Real estate agency ERA Asia Pacific said the market’s bullishness could be attributed to the opening of the two integrated resorts, as well as the Youth Olympic Games to be held in Singapore.
Singapore is becoming increasingly visible among international investors and high net worth individuals, said Eugene Lim, associate director of ERA Asia Pacific.
According to the URA index, prices of private homes on the city fringe during the first quarter rose the highest, by 7.9%. Prices in the city climbed 4.4%, while those in suburban areas rose 4.3%.
Rentals of private residential properties also increased 4.7% and the index also shows that a total of 4,372 uncompleted private residential units were launched for sale by developers in the first quarter of the year, almost twice the 2,227 units released in the previous quarter.
Colin Tan, head of research and consultancy at Chesterton Suntec International, reckons that the increase in supply of private residential units may help temper prices further in the next quarter.