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Resale flat prices fall for fourth consecutive quarter

SINGAPORE — Resale flat prices fell for the fourth consecutive quarter, with property analysts attributing this to the various property cooling measures, especially loan restrictions.

SINGAPORE — Resale flat prices fell for the fourth consecutive quarter, with property analysts attributing this to the various property cooling measures, especially loan restrictions.

Flash estimates released by the Housing and Development Board (HDB) yesterday showed the Resale Price Index (RPI) fell 1.3 per cent to 196.0 from April to June — following its sharpest decline in almost nine years in the past two quarters at about 1.5 per cent for each quarter. The index fell 5.1 per cent compared with the second quarter of last year, when the RPI hit a historic high of 206.6.

Analysts cited the Mortgage Servicing Ratio as the main reason for the RPI’s sustained decline, as smaller loans mean fewer families can afford to buy bigger flats.

Mr Ku Swee Yong, chief executive of Century 21 real estate agency, said families who face loan curbs now have the option of upgrading to brand-new flats under the large supply of Build-to-Order (BTO) projects — further reducing demand for resale flats.

A total of 9,707 flats under three BTO exercises and 3,383 flats under a Sale of Balance Flats exercise were sold in the first half of this year. This month, the HDB will also offer 3,810 BTO flats in Punggol, Sembawang, Toa Payoh, Woodlands and Yishun.

“As the Government is unlikely to remove the cooling measures or vary from its planned BTO launches for the rest of this year, the RPI is likely to continue to decrease,” said Mr Nicholas Mak, executive director of SLP International Property Consultants.

Other factors contributing to the fall in resale demand include the three-year wait for new permanent residents buying resale flats and allowing singles to buy two-room BTO flats in non-mature estates, analysts said.

Changes to the resale procedure announced in March — which require buyers and seller to agree on a price before getting an official valuation — have also helped to keep prices in check, said ERA key executive officer Eugene Lim.

Noting that it will be difficult for resale flats prices to regain momentum, PropNex chief executive Mohamed Ismail said: “This is an opportune time for those considering upgrading.”

While Mr Ismail does not rule out the possibility of the resale market picking up in the second half of this year, as lower prices could entice buyers, he still shares the views of those analysts who are expecting the RPI to continue falling over the next two quarters, to reach an overall yearly decline of about 5 to 8 per cent, as forecasted earlier.

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