Singapore real estate prices jumped to a record high in the second quarter as the city-state’s economic recovery broadened.
Private residential property prices rose 5.2 percent in the April-to-June period to the highest level since the government began the index in 1975, the Urban Redevelopment Authority said Thursday.
Prices leapt 5.6 percent in the first quarter and 7.4 percent in the fourth, bouncing back strongly after diving 25 percent in the 12 months to mid-2009.
Singapore’s low crime rate, good schools and low personal and corporate taxes have helped the island rank near the top of expatriate global quality-of-life surveys and attracted investors to the residential and office property markets. Singapore opened its first two casino-resorts this year, boosting tourist visits.
Singapore has sought to slow price gains by implementing a series of measures this year to discourage short-term speculative investment in property.
The government earlier this year imposed a 1 percent to 3 percent tax on residential properties sold within one year of purchase and lowered the loan-to-value limit to 80 percent from 90 percent on loans for private housing. Officials have also pledged to release more government land this year for real estate development to help boost housing supply.
Policymakers throughout Asia have grappled with balancing low interest rates to spur economic growth and the danger that cheap credit can fuel asset bubbles.
By the end of last year, Singapore prime residential property was selling at $1,500 to $2,000 per square foot — still less than the $2,000 to $2,500 per square foot in Hong Kong, Asia’s most expensive property market, according London-based real estate consultancy Knight Frank.
Investor confidence in Singapore has been bolstered by a soaring economy in the first half, led by a surge in manufacturing. Gross domestic product grew a record 15.5 percent in the first quarter from a year earlier, and DBS Bank said it expects a 16 percent expansion in the second quarter.
DBS raised its 2010 growth forecast Wednesday to 13 percent from 10.3 percent and expects the manufacturing sector to grow 50 percent in the second quarter.