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Private homes prices down 1% in Q4 2014: URA

SINGAPORE — The Republic’s private home prices softened further in the last three months of 2014 to hit the lowest level in more than three years, flash estimates by the Urban Redevelopment Authority (URA) showed today (Jan 2).

Private houses in Singapore. TODAY file photo

Private houses in Singapore. TODAY file photo

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SINGAPORE — The Republic’s private home prices softened further in the last three months of 2014 to hit the lowest level in more than three years, flash estimates by the Urban Redevelopment Authority (URA) showed today (Jan 2).

The 1 per cent dip in overall prices, based on transactions in the first 10 weeks of the October-December period, was steeper than the 0.7 per cent fall seen in the previous three months. This also represents the fifth consecutive quarterly decline, according to URA.

Property analysts noted that the fourth quarter price levels have fallen to those seen in the second half of 2011, and bring the decline for the whole of 2014 to 4 per cent, the first annual decline since 2008.

“The 1 per cent quarterly fall is not unexpected… Market watchers are now largely in agreement that the TDSR (Total Debt Servicing Ratio) framework, which takes into account all loan obligations, has served its purpose in bringing down sales volume and cooling prices and at the same time ensuring the health of the market,” said Mr Desmond Sim, head of CBRE Research, Southeast Asia.

The effects of TDSR, as well as cooling measures such as Additional Buyer’s Stamp Duty (ABSD), once again caused prices to fall across all market segments in the fourth quarter of last year.

In the non-landed private housing market, the Core Central Region (CCR) registered a steeper decline of 0.9 per cent, compared to the 0.8 per cent fall previously. In the Rest of Central Region (RCR), prices slipped 1.2 per cent, also quicker than the 0.4 per cent dip in the third quarter. The Outside Central Region (OCR) saw prices fall 0.9 per cent from the 0.3 per cent dip in the preceding three months.

Prices of landed properties fell by a relatively moderate 1.1 per cent, compared to the 1.8 per cent decline in the previous quarter.

Analysts expect the downtrend in prices to continue into the new year, as property curbs continue to keep buying sentiment subdued. Some warn that the anticipated supply glut of completed homes and interest rates normalisation may quicken the pace of price declines in 2015.

“The danger for the market is that if activity continues to shrink and with the economy still growing in a low unemployment environment, strong holders will not give in to even marginally lower asking prices and what’s left over will be an increasing number of forced sale properties. Once the latter start to build in numbers, the price index can suddenly tip over and collapse,” said Mr Alan Cheong, senior director of Savills Research.

However, Colliers International’s director of research and advisory Chia Siew Chuin said the Government’s move to trim supply of land for private housing development under its land sales programme could provide some support to the market.

Ms Chia projects prices to fall by 5-8 per cent for the whole of 2015, barring any external shocks and surprises.

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