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Private home prices down for 8th consecutive quarter

SINGAPORE — Private home prices headed south for the eighth consecutive quarter in the July-to-September period — the longest losing streak in 13 years — as property curbs continued to cool the domestic property market.

Private housing along the Singapore River. TODAY file photo.

Private housing along the Singapore River. TODAY file photo.

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SINGAPORE — Private home prices headed south for the eighth consecutive quarter in the July-to-September period — the longest losing streak in 13 years — as property curbs continued to cool the domestic property market. 

Analysts said the losing streak is likely to continue considering that the curbs are unlikely to be lifted anytime soon. Minister for National Development Lawrence Wong said earlier this month that the price adjustments to date are still moderate compared with increases in earlier years, and the Government did not want to “risk a premature market rebound”.

The final statistics for the third quarter released today (Oct 23) confirmed earlier estimates of a 1.3 per cent fall in overall private residential property prices, the Urban Redevelopment Authority (URA) said. This is quicker than the 0.9 per cent fall recorded in the second quarter, and brings the total price decline to 8 per cent since its peak in the third quarter of 2013. The last time there were eight consecutive quarters of price declines was from the third quarter of 2000 to the second quarter of 2002.

Analysts said the continued fall in prices is not surprising as the buying power of potential customers has been limited.

“We observe that a price below S$1.5 million is the sweet spot for buyers, rather than those priced higher because of the stricter loan guidelines as well as the impact of having to pay Additional Buyer’s Stamp Duty,” said Mr Eugene Lim, key executive officer of property agency ERA.

Price declines were observed across the island. In the non-landed homes segment, prices in the Core Central Region (CCR), or city centre, fell 1.2 per cent. Both the Rest of Central Region (RCR), or city fringes, as well as the Outside Central Region (OCR), or suburbs, slipped by 1.6 per cent. 

In the second quarter, home prices in CCR and RCR fell 0.6 per cent, while that in the OCR were down 1.1 per cent. However, landed properties showed greater resilience, with the fall in prices slowing to 0.4 per cent from the 1 per cent decline in the previous quarter. 

Landed homes account for a small percentage of the total housing stock and transactions in Singapore, and their homeowners are also generally more well-off and resistant to “desperate selling”, said Mr Chris Koh, director of property firm Chris International.

Meanwhile, launches and sales by developers rose in the third quarter compared with the April-to-June period. Developers launched 2,435 uncompleted private residential units for sale, up from the 2,099 units in the second quarter. Transactions jumped to 2,410 from the 2,116 units sold in the second quarter.

Analysts attributed the improvement in sales to more attractive locations and pricing of the launches. These two factors will continue to be the main determinant of sales in the coming months, they said.

A larger supply coming on stream though means that developers “will have to up their game” in the coming months to clear units, particularly in the OCR segment, which faces greater competition from executive condominiums (ECs) after the eligibility income ceiling for the latter was raised, Mr Lim added.

However, Mr Koh said private homes will continue to appeal to investors. “There will always be a group who do not want to be limited by the EC restrictions. By buying a private unit, they can sell tomorrow, they can rent it out immediately. So, private condos still have an appeal,” he said.

 

CORRECTION: In an earlier version, we had reported that developer launches and sales went down in Q3 compared to Q2. This is incorrect. Both launches and sales in Q3 are higher than Q2. We are sorry for the error. 

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