Home prices are still going up in Singapore despite government measures to try and slow the market to avoid a property bubble.
One major bank predicts they could increase by 8% more between now and 2017.
Property analysts are predicting more cooling measures from the government to help the control prices from rising too high.
Since the global financial crisis began, residential property prices in Singapore have soared by 56%.
Analysts at Credit Suisse predict that prices will rise by 8% between now and 2017, fuelled by demand and low interest rates.
They say interest rates will remain as they are until 2015 and then rise by two percentage points by 2017.
More cooling on the way
According to the Urban Redevelopment Authority (URA), prices are picking up at their fastest rate since the middle of 2011.
This is despite the government introducing cooling measures six times in the last three years in a bid to control property prices.
The URA’s figures are backed up by international real estate firm Jones Lang LaSalle which says Singapore’s residential market registered gains of between 2% and 15.8% in each quarter from the third quarter of 2009 until the second quarter of 2011.
A spokesman for the firm said: “Recent price increases look relatively tame compared to what happened from 2009 to 2011 but they look robust when viewed against the cooling measures imposed by the government and the poor economic environment of the global and local economies.”
He said the firm predicts policy measures being introduced which will help suppress property increases to around 2% to 4%.
The rising price of Singapore’s homes is surprising since as the city has had the unenviable reputation of one of the most expensive places to live in the world for several years.
Price increases are not across the board and are largely dependent on location.
More price rises predicted
However, around half of last year’s price increase occurred in the latter part of the year, says real estate firm PropNex Realty.
A spokesman said: “We certainly saw a rebound in private property prices in the last quarter which contributed to more than 50% of the rise for the entire year.
“Prices in the central region are leading the growth, and we expect this to continue because land prices are high for new properties.”
The firm is predicting that prices will increase this year by between 4% and 5%, although private suburban home values could rise by as much as 10%.
Analysts also say that a large housing supply in the pipeline to meet demand will do little to offset the upward trend for Singapore’s property market.
