SINGAPORE: Midrange to low-end home prices in Singapore could rise as much as 50 percent by 2012 after lagging behind gains in luxury apartments, said Kwek Leng Beng, chairman of City Developments, the country's second-largest developer.

Prices rose 17 percent last year for homes in the city-state's prime areas, including those close to the Orchard Road shopping belt and on the resort island of Sentosa, more than four times as fast as suburban residences, government data shows.

Singaporean home prices have recovered from a slump that hit the city-state in 1996, when the government imposed taxes to curb speculators who sold properties within three years. The city's longest economic expansion in more than a decade, which spurred gains in the luxury homes, could lift prices for cheaper apartments as record job creation in industries like financial services and construction pushes demand higher.

"In the mid-end, we are still some 6 to 7 percent below the peak of 1996, before the crash, so it still represents a good buy," Kwek said in an interview late Tuesday. The luxury home market "has gone up in a straight line, and therefore the high-end will continue, but gradually."

Singapore, ranked by Capgemini and Merrill Lynch as the country with the fastest-growing number of millionaires, is creating jobs to meet demand for private banking services. The government also revised estimates this month for construction contracts to reach 22 billion Singapore dollars, or $14 billion, in 2007, from an earlier forecast of 19 billion dollars. more...