[SINGAPORE[ Despite the curbs on housing loan tenure introduced in October, the Urban Redevelopment Authority's private-home price index flash estimate in Q4 2012 galloped at its fastest clip in six quarters, driven by rising prices of mass-market condos.

The latter were, in turn, buoyed by strong public housing resale flat prices.

URA's overall private-home price index in Q4 rose 1.8 per cent from the previous quarter, after a 0.6 per cent gain in Q3. This is the biggest increase since the 2 per cent rise in the index in Q2 2011. For the whole of 2012, the index climbed 2.8 per cent, about half the 5.9 per cent rise recorded in 2011.

Giving a geographical split of prices of non-landed private homes, URA said that the index for the Outside Central Region (OCR) rose 3.4 per cent quarter-on-quarter in Q4, against a one per cent gain in Q3. This is the strongest showing in 10 quarters, since a 5.7 per cent jump registered in Q2 2010.

Some property consultants attribute the OCR's good performance to developers achieving higher price points for projects near MRT stations. Other market watchers, however, reckon that this could have been due to older completed condos in the suburbs slowly catching up with the higher property prices set by new housing projects. More light on what drove up OCR prices in Q4 will be shed on Jan 25, when URA releases more detailed price indices for completed versus uncompleted properties.

For the Rest of Central Region (covering city-fringe locations), the Q4 index was up 0.9 per cent, on a par with the 0.8 per cent rise in Q3. In the Core Central Region - where Singapore's choicest homes are located - the price index rose 0.8 per cent in Q4, compared with a 0.1 per cent rise the previous quarter.

Analysts note that the government's cooling measures, such as the additional buyer's stamp duty introduced in December 2011 and the mortgage tenure curbs in October 2012, have helped put on lid on private-home price growth. Even so, high liquidity and low interest rates continued to draw investors to the property market last year.

These factors should remain in play this year, while rising land bids at recent state tenders would create upward price pressure at new launches. However, the combination of a weaker economy, more completed private homes coming onstream and affordability issues will help rein in price increases, analysts say.

"The overall effect of market dynamics and government intervention will result in at most a minimal increase of no more than 2 per cent in the URA's overall private-home price index in 2013," predicted Ong Teck Hui, Jones Lang LaSalle national director (research and consultancy). "The main risk to the market is deteriorating economic conditions facing Singapore and how that will eventually affect corporate performance and job stability, wages and bonuses. It will be challenging for policymakers to calibrate any further cooling measures to ensure they don't exacerbate a property downturn in an adverse economic climate."

Chia Siew Chuin, Colliers International director of research and advisory, also reckons that the URA's overall private-home price index would inch up no more than 2-3 per cent this year.

Agreeing, Knight Frank chairman Tan Tiong Cheng said: "With a higher number of physical completions of private homes this year as well as next year, the acid test is: how many tenants there will be to fill those properties bought for investment. The writing is on the wall: a weakening rental market may deter investors amid slower economic growth and a tightening of Singapore's foreign worker and immigration policies.

"HDB flat-dwellers who have bought suburban mass-market private condos may have to make a hard decision when their condos are completed, whether to sell their HDB flat or condo. With that challenge, any growth in overall private-home prices for 2013 will at best be like 2012's, that is, a 2-3 per cent rise."

Mr Tan noted that against the backdrop of a weakening economy, if mass-market prices moved up beyond 5 per cent this year, affordability would be an issue as incomes would not grow by the same extent.

CBRE executive director (residential) Joseph Tan reckons that despite higher land acquisition costs, developers will maintain home prices at current levels as far as possible. "It is unlikely that total new home sales volume will exceed 20,000 units in 2013 based on developers' unsold stock as at end-2012 and new projects in the pipeline."

CBRE estimated that developers last year sold about 21,600 units in the primary market, significantly surpassing the previous record of 16,292 in 2010.

In the secondary market, Savills Singapore's analysis of URA Realis caveats data as at yesterday showed, 12,566 completed private homes changed hands last year, down from 14,170 in 2011. Based on preliminary figures, 2,269 sub-sale deals (involving projects under construction) were transacted last year, down from 2,690 in 2011. Final figures for 2012 are expected to rise as more caveats for deals done in Q4 stream in over the next few weeks.

The above transaction volumes as well as URA's price indices exclude executive condos (ECs), a public-private housing hybrid.

Savills research head Alan Cheong noted that the average price for non-landed private homes sold by developers (excluding ECs) was nearly $1.2 million last year, translating to $1,213 per square foot based on an average unit size of 974 sq ft. "For a family with a budget of about $1.2 million, assuming it buys into a new EC project priced at about $730 psf on average, it could get a much bigger unit of about 1,640 sq ft. This explains why so many buyers are being drawn towards EC projects."