Private home prices see first annual fall since 2008
Aerial view of landed property and HDB housing along Bukit Timah. TODAY file photo
By
LEE YEN NEE
leeyennee@mediacorp.com.sg
Published: 4:12 AM, January 24, 2015
Singapore — The Republic’s private home prices fell for the first time in six years in 2014, as cooling measures and loan curbs continued to soften buying interest.
With the authorities showing little inclination to withdraw or adjust property curbs, the downtrend will probably continue this year, analysts said.
“With macroeconomic uncertainty and prospective buyers still holding out from investing in property, the fall in prices is expected to continue ... Developers would need to moderate prices and roll out attractive product positioning to move units,” said Ms Alice Tan, director and head of research at Knight Frank Singapore, who predicted prices to fall by another 4 to 6 per cent this year.
In the last three months of 2014, overall prices fell 1.1 per cent, more than the 1 per cent drop in earlier estimates and the 0.7 per cent slip in the previous quarter, the latest statistics by the Urban Redevelopment Authority showed.
The fifth consecutive quarter of price decline resulted in an overall drop of 4 per cent last year — the first yearly dip since 2008 — and a reversal from a 1.1 per cent gain in 2013.
“The series of cooling measures introduced since 2009 have helped to tame the over-exuberance and speculative urge of homebuyers. When the Total Debt Servicing Ratio framework was introduced in June 2013, it was deemed the most impactful measure because sales volume was halved,” said Mr Desmond Sim, head of CBRE Research in South-east Asia.
These measures, however, have helped ensure those who bought homes in the past 18 months are in a stronger financial position and will be able to cope with an impending rise in interest rates, he added.
All segments of the market posted price declines in the fourth quarter. In the non-landed home segment, the city fringes or Rest of Central Region led the decline with a 1.4 per cent dip, more than the 0.4 per cent fall in the previous quarter.
The city centre or Core Central Region slipped 0.9 per cent, extending from a 0.8 per cent decrease previously, while the suburban or Outside Central Region saw a 0.8 per cent fall after a previous 0.3 per cent contraction.
Prices of landed properties dropped by 1.3 per cent, compared with a 1.8 per cent decline in the preceding quarter. While the projected lower prices this year may lure some buyers back, sales volumes could still be low because of headwinds in the market, said Colliers International’s director of research and advisory Chia Siew Chuin, citing weak sentiment in the leasing market and normalisation of interest rates.
Last year, developers launched 7,693 units and sold 7,316 homes, about half of 2013’s 15,885 and 14,948 units launched and sold, respectively.
Lee Yen Nee
