Prices of private homes and Housing Board resale flats weakened further in the last quarter, although the two markets may be headed for different sorts of landing.
Private home prices were down an estimated 1.3 per cent, according to flash estimates from the Urban Redevelopment Authority (URA) yesterday.
This marks eight straight quarters of price declines and is the fastest pace of decline since the second quarter of 2009 amid the global financial crisis.
Private home prices fell 0.9 per cent in the second quarter and are down about 8 per cent from their last peak in the third quarter of 2013.
There was less pain for HDB owners, with resale prices down about 0.3 per cent for the quarter, according to HDB's flash estimates.
While this was the ninth straight quarter of decline, it is the smallest quarterly price drop over the nine quarters and follows a 0.4 per cent drop in the second quarter.
HDB resale prices are down about 9.8 per cent from their last peak in the second quarter of 2013.
HDB resale prices are stabilising, mainly due to the availability of transaction information, which means buyers are generally making offers based on recently transacted prices, said ERA Realty key executive officer Eugene Lim.
The impact of a weakening economy and rising interest rates is also more muted for HDB owners, who can largely service their loans with Central Provident Fund money, said Mr Ku Swee Yong, Century 21's chief executive.
Most owners of private homes are not yet feeling the heat, but expectations that prices will fall further could mean sellers are trimming asking prices now.
This may be "for the sake of getting the transaction over... (as) for many sellers, it would have been a long-drawn battle if they were trying to dispose of their units in the last couple of years", said JLL national research director Ong Teck Hui.
Price declines could be sharper in the future, especially if economic conditions deteriorate, he added.
"After the implementation of the anti-speculation measures in May 1996, prices started to ease but when the Asian financial crisis occurred in 1997, prices quickly spiralled downwards."
Price declines gathered pace across all market segments, according to URA estimates.
Central-region prices were down about 1.3 per cent, well over the 0.6 per cent decline in the second quarter.
City-fringe prices fell 1.5 per cent compared with a 0.6 per cent decline previously.
Suburban prices dropped 1.6 per cent against the 1.1 per cent second-quarter slip.
Strong sales from High Park Residences, which was launched in the third quarter at relatively low prices, could have placed downward pressure on suburban prices, especially as market volumes are thin, said OrangeTee research manager Wong Xian Yang. "Price falls in the central region and city fringes are in line with weaker market sentiments," he added.
Indeed, the market has in the past quarter been buffeted by uncertainty as events such as the Chinese yuan devaluation, stock market plunge and rising interest rates take their toll, although there may be no real sell-off unless job losses take place and the three-month Singapore Interbank Offered Rate exceeds 2 per cent, said Mr Ku.
On top of this, the rental outlook is weak amid rising home completions.
HDB prices are expected to soften about 3 per cent for the year, with a possible uptick in volume to 19,000 to 20,000 units, up from 18,100 units in 2013 and 17,318 units last year, said PropNex Realty chief executive Mohd Ismail.
Private home prices may be down by up to 5 per cent for the period, while volumes should remain weak.
- SEE BUSINESS