Home prices surge 2.8% in 2012

It's an all-time high.

According to Colliers International, URA’s flash estimate for 4Q 2012 showed that prices of private residential property rose 1.8% QoQ – culminating to a 2.8% YoY increase for 2012. Prices are now at an all-time high, after recovering 59% from the global financial crisis in 2Q 2009.

Here's more from Colliers International:

The overall yearly growth of 2.8% is slower than the 5.9% increase registered in 2011 – indicating that Government’s market cooling measures, such as the Additional Buyers’ Stamp Duty and the latest mortgage tenure curbs, have been effective to some extent in moderating the price growth of the private residential market in 2012.

Notwithstanding, low interest rates and high liquidity continued to persist and drive demand for homes. The pace of price growth in 4Q 2012 on a QoQ basis had increased to 1.8%, from 0.6% in 3Q 2012 and 0.4% in 2Q 2012.

All three market regions experienced higher rates of price growth, although the pace of increase varied across the regions.

The overwhelming popularity of homes in Outside Central Region (OCR) helped to boost prices of mass-market homes. Prices of non-landed private homes in OCR increased the most – rising 3.4% QoQ, a stronger uptick from the 1% quarterly growth in 3Q 2012.

The price appreciation in the OCR also drove homebuyers to consider homes in the Central Region, as the price gap between new mass-market homes and completed higher-tier properties continued to narrow.

As a result, prices of non-landed housing units in the Core Central Region (CCR) and Rest of Central Region (RCR) also rose by a faster 0.8% and 0.9%, respectively in 4Q 2012, compared to the corresponding increases of 0.1% and 0.8% three months earlier.

The increased momentum in the QoQ price up-trend – particularly in the mass-market housing segment, as well as the return of buying interest in the high-tier segments – are likely to keep the authorities high on guard again and have further heightened policy risks in the residential sector.