Private home prices fall at sharpest pace in 7 years

Q3's 1.5% drop marks 12th straight quarter of decline; HDB resale prices remain stable

Private home prices here suffered their steepest fall in seven years in the third quarter.
Private home prices here suffered their steepest fall in seven years in the third quarter. PHOTO: ST FILE

Private home prices here suffered their steepest fall in seven years in the third quarter, and have now declined for 12 straight quarters.

In contrast, the resale prices of public housing flats remained stable in the third quarter.

Sellers took another blow as overall private home prices fell 1.5 per cent in the third quarter over April to June, following a dip of 0.4 per cent in the second quarter, Urban Redevelopment Authority (URA) flash estimates showed yesterday.

The price drop was the sharpest since the second quarter of 2009 when prices fell 4.7 per cent.

SLP International Property Consultants research head Nicholas Mak said: "Home prices have taken a beating in the third quarter with declines across all segments... all these point to continued weakness in the... private residential market."

Worries over a weaker economy and news of job cuts seem to have rattled the property market.

Mr Wong Xian Yang, head of research and consultancy at OrangeTee, said: "It shows overall market conditions remain weak, and can be easily swayed by negative developments in the economy and the job market."

Factoring in the latest estimates, overall private home prices have slumped 10.8 per cent from a peak in the third quarter of 2013.

Last month, the Monetary Authority of Singapore said property curbs will not be eased "any time soon". It remains to be seen if developments since then will change that stance.

Some market watchers noted that a change in the way the price index was computed could have affected the third-quarter data.

To lift market transparency, URA's latest flash estimates include for the first time the net sales prices of de-licensed projects - as opposed to gross prices that might include discounts and rebates.

De-licensed projects are those that have obtained the Certificate of Statutory Completion and where individual titles have been issued.

Prices of private units fell across the board in the third quarter, with the steepest drop in the high-end homes-heavy core central region. It fell 1.8 per cent from the second to third quarter, reversing a 0.3 per cent second-quarter rise.

City-fringe prices fell by 1.3 per cent, after rising 0.2 per cent in the previous quarter, while those in the suburbs slid 1.2 per cent after a 0.5 per cent dip in the previous quarter.

Landed-property prices fell 2.2 per cent quarter-on-quarter, from a 1.5 per cent second-quarter drop.

Analysts expect property curbs, slower economic growth and job market uncertainty to continue to weigh on overall private home prices for the rest of the year.

The Housing Board yesterday said the flash estimate for its resale index was unchanged from the second quarter at 134.7.

The HDB also said yesterday that next month, it will offer about 5,090 new flats in Bedok, Bidadari, Kallang/Whampoa and Punggol in a Build-To-Order exercise.

A version of this article appeared in the print edition of The Straits Times on October 04, 2016, with the headline 'Private home prices fall at sharpest pace in 7 years'. Print Edition | Subscribe