Private home prices fall for 13th straight quarter

SINGAPORE — Private home prices in Singapore softened further in the last three months of 2016 to hit their lowest level in six years, as the longest falling streak on record was extended to 13 consecutive quarters, with analysts warning that the decline could extend this year.

The private residential property index fell 0.4 per cent quarter-on-quarter in the October-to-December period, slowing from the 1.5 per cent decline registered in the previous three months, flash estimates from the Urban Redevelopment Authority (URA) showed on Tuesday (Jan 3).
 
The latest drop brings Singapore’s private home prices to levels last seen in 2010. From the recent peak in the third quarter of 2013, prices have fallen 11.2 per cent. For the full year of 2016, prices fell 3 per cent, narrowing from the 3.7 per cent decrease in 2015, the URA data showed.

“This could indicate that the private residential property price is approaching the bottom. However, worries over a weaker economy, the poor labour market and concerns about rising interest rates will continue to cast a shadow over the Singapore property market,” said Mr Nicholas Mak, research and consultancy head at SLP International Property Consultants. 

The fourth-quarter price fall was led by the non-landed private residences segment, with the city fringes, or Rest of Central Region (RCR), registering the biggest decline at 2 per cent, compared to a decrease of 1 per cent in the previous quarter. Prices in the suburbs, or Outside Central Region (OCR), declined by 0.3 per cent, after a 1 per cent decline in the previous quarter. 

Prices in the city centre, or Core Central Region (CCR), were unchanged after the 1.9 per cent decline in the previous quarter. 

For the whole of 2016, prices in the CCR, RCR and OCR fell 1.3 per cent, 2.8 per cent and 3.1 per cent, respectively, the URA data showed.

Prices of landed properties recorded the first increase in three years, rising 0.9 per cent in fourth quarter of 2016 after the 2.7 per cent decline in the previous quarter. For the whole of 2016, prices of landed properties fell 4.4 per cent — the largest drop among all market segments. 

However, Mr Mak said: “We believe that the increase in the landed housing price index does not signal the start of a price recovery. This housing segment will continue to face weak demand and downward price pressure this year.” 

Analysts expect overall private housing prices to continue falling this year amid a lack of positive economic catalysts, but they added that a further moderation in prices could attract more buyers into the market and lift transaction volume. 

“We are expecting a 3 to 3.5 per cent decrease in prices for 2017, while transaction volume may see an increase to between 16,000 and 18,000, up from the 15,000 to 16,000 estimate for 2016,” said Mr Eugene Lim, key executive of ERA Realty Network.

The URA flash estimates were compiled based on transaction prices given in contracts submitted for stamp duty payment, and data on units sold by developers up to mid-December 2016. URA will release the full statistics for the fourth quarter on Jan 26.