Private property prices fall again

Skyline of the private property, developments and commercial buildings seen from Scotts Road on Feb 18, 2014.
Skyline of the private property, developments and commercial buildings seen from Scotts Road on Feb 18, 2014.PHOTO: ST FILE

Private property prices fell again in the April to June period - the seventh consecutive quarter of decline.

While the declines have been persistent, experts feel they have not been large enough to prompt the Government to tweak cooling measures.

Prices fell 0.9 per cent in the second quarter after easing 1 per cent in the first quarter, according to Urban Redevelopment Authority data yesterday. They are now down 6.7 per cent from their recent peak in the third quarter of 2013.

"It may be another one to two years before a 10 to 15 per cent decline materialises. That may provide some indication as to when the measures could possibly be relaxed or removed, from the price point of view," said Mr Ong Teck Hui, JLL national research director.

While the Government has not stated a price target, Monetary Authority of Singapore managing director Ravi Menon said on Tuesday that the fall so far is "really not all that much" and that it is still premature to consider removing any cooling measures.

A market correction of 20 to 25 per cent would be too severe - akin to the magnitude during the global financial crisis, said Mr Ong, adding that other factors the Government could be taking into consideration are the normalisation of interest rates and sales volumes, which have come down significantly.

Prices of landed homes were down 1 per cent in the three months to June 30 after falling 0.9 per cent in the first quarter.

Non-landed home values fell 0.8 per cent after a 1.1 per cent decline in the first quarter.

The price decline for suburban apartments gathered pace, shedding 1.1 per cent in the quarter. That was similar to the fall in the first quarter and more than declines over the past year.

Central region and city fringe apartment prices were both down 0.6 per cent in the second quarter.

Home vacancy rates shot up in the quarter, gaining 0.7 percentage points to 7.9 per cent - the highest in nearly 10 years.

This was due to a sharp increase in condo vacancies, which rose 1.6 percentage points to 9.1 per cent. A total of 6,969 private homes were completed in the second quarter, more than double that in the first quarter.

The completion of a few major projects in the north-east region - including the 882-unit A Treasure Trove in Punggol Walk and the 702-unit Bartley Residences - contributed to the vacancy rate rising from 5.8 to 11.8 per cent in the region, noted Mr Wong Xian Yang, senior manager of research and consultancy at OrangeTee.

But while a time lag exists between a project's completion and when residents move in, "the reality is that the market is still coping with an overwhelming number of completions", said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia.

Experts tipped vacancy rates to rise further, which will put pressure on rentals. Rents declined 1.1 per cent in the second quarter, after falling 1.7 per cent in the first.

A version of this article appeared in the print edition of The Straits Times on July 25, 2015, with the headline 'Private property prices fall again'. Print Edition | Subscribe