Record high SG residential property prices - 26 March 2010

Here is the report that spurred the headlines yesterday about record high property prices, and looking forward, 10-15% more increases.

Here is a summary from the Savills website:

Total transaction volume in 2009 was more than double 2007’s level.
New home sales were just a shade off the 2007 peak.
A resurgence in residential land acquisitions was recorded in 2H/2009 on the back of recovering confidence.
High-end residential prices rose by 3.9 per cent year-on-year, whilst super-luxury residential prices are still 0.5 per cent lower than one year ago.
The Government Land Sales Programme posted 26 residential sites for 1H/2010.
High-end homes are poised to take centre stage in 2010 after lagging behind their mass and mid-tier counterparts in 2009.

The last time property prices went ahead of the stock market index, it was a bad ending... and again it is attempting to do so. While this take off will rocket property prices, it remains to be seen how and when the reality will sink in.

Here is the STI chart from Yahoo!, and clearly shows that the stock market peak of 2007 has not been broken.


This is my tracking of the RPPI vs the STI over as much data as I can get...


So far, the STI outruns the RPPI...

IF the report is right, and the SG RPPI blasts off making a higher peak than the last high, there is a strange divergence leaving the property market overheated and way off overpriced. While this may hold out for a long time due to demographic changes in SG, it will have to be moving back to mean at some point.

In any case, a regular born and bred in SG citizen will from now feel the pain... time to get super rich.