Construction costs to lift condo prices

This is despite the 4-per-cent tax incentive property developers have got with the government's stimulus package for the sector. It comprises a reduced special business tax - from 3.3 per cent to 0.01 per cent,  transfer-fee reduction from 2 per cent to 0.01 per cent and mortgage-registration-fee reduction from 1 per cent to 0.01 per cent. The package has been effective since March 30.

Property broker Harrison's chief executive Alan Lin said residential project prices were expected to increase significantly because of rising construction costs. The segment likely to see the highest rise is city condominiums in which steel and cement prices, which have doubled, have a great impact.

"Most city condominium projects undergoing construction and presale have increased prices between 7 per cent and 10 per cent this year compared to last year. However, a rise of between 10 per cent and 20 per cent is expected as construction costs soar," he said.

Lin said home-buyers who bought property last year got it at cheaper rates than those who are buying this year.