Private home prices down 0.7% in Q3

SINGAPORE — Prices of private homes in the Republic fell for a fourth consecutive quarter between July and September, but the pace of decline was more moderate, in what analysts said signals a market that is stabilising.

Still, they cautioned that the market has not made a complete U-turn and prices could soften further in the coming months.

In the third quarter this year, overall prices of private residential properties were down by 0.7 per cent, quicker than the 0.6 per cent in the flash estimates three weeks ago but slower than the 1 per cent fall in the March to June quarter, data by the Urban Redevelopment Authority (URA) showed yesterday.

Property analysts said the softer fall was underpinned by several “higher-priced” new launches, such as Highline Residences at Kim Tian Road, City Gate at Beach Road and Bijou at Jalan Mat Jambol, where units at the developments were sold at more than S$1,800 per square foot.

“There weren’t that many launches in (the third quarter), but the prices of a few launches were on the higher side, so that gave some support to the price index. The market is approaching a soft landing, but I don’t think this is the bottom yet,” said Mr Nicholas Mak, executive director at SLP International Property Consultants.

Condominium prices declined across all geographical segments, with the city centre, or Core Central Region (CCR), recording the steepest fall of 0.8 per cent compared with 1.5 per cent previously. Prices in the city fringes, or the Rest of Central Region (RCR), dipped 0.4 per cent, similar to the previous quarter, while suburban or Outside Central Region (OCR) prices slipped 0.3 per cent from 0.9 per cent.

In the landed segment, prices were 1.8 per cent lower, compared with the 1.7 per cent decrease in the previous quarter. In the third quarter, developers launched 1,294 private homes and sold 1,531 units, both down from the 2,843 units launched and 2,665 units sold in the second quarter. Resale transactions also dropped to 1,288 sales from 1,389 transactions.

“Economic fundamentals are sound and we are not in any crisis mode. As sellers are under no pressure to cut prices significantly, the (market) continues to see a mismatch of expectations and deals take longer to close,” said Mr Eugene Lim, key executive officer of ERA.

Knight Frank’s director of consultancy and research Alice Tan said private home prices could see a slower decline in the last three months of the year, as developers are less likely to moderate prices further as they try to maintain profit margin and manage development cost.

Mr Mak agreed, adding that as several sites sold under the Government Land Sales programme in the second half of this year are in better locations, the launches would be able to hold their prices, thus limiting the softening of the URA index.

“(But) I expect the price decline to continue for another year because there’s still a lot of supply in the pipeline and demand is still restricted by the cooling measures and financing curbs,” he said.

The URA said that as at the end of the third quarter, there were 74,496 uncompleted private homes in the pipeline, with 28,120 of them unsold.