Fluctuations in Prices for Commercial Properties

Mr Lim Biow Chuan asked the Minister for National Development whether the increase in the prices of commercial properties is within expectation and whether the Government is contemplating measures to rein in excessive price fluctuations for commercial properties.

Prices of office and shop space increased by 1.4% and 2% respectively last year. This is significantly slower than the 13.8% and 5.3% increases for the two sectors in 2011.

In the first quarter of this year, prices rose by 2.1% in both sectors. These price increases are driven mainly by the sales of strata office and shop units in new project launches.

In the rental market, however, both the office and shop space segments declined by 1.3% and 0.3% respectively last year. They have continued to decline by 0.2% and 0.6% in the first quarter of 2013.

The softening rental market, together with a large supply of new commercial space in the pipeline, should help keep overall commercial property prices and rentals in check.

We will continue to closely monitor the market. If necessary, we will introduce appropriate measures to prevent speculation and excessive price increases in this market.