Singapore residential property prices keep dropping

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singapore-residential-propertySingapore home prices dropped for a 12th quarter in a row, extending the longest losing streak on record, with the slow decline accelerating in the third quarter of this year, according to preliminary data from the Urban Redevelopment Authority released on October 3.

According to the data, private residential prices fell 1.5 per cent in the three months ended September 30 from the previous quarter, capping the longest series of quarterly losses since 1975 when prices were first published. Overall, private home values have dropped 10.9 per cent from the peak in 2013. Prices dipped by 0.4 per cent in the second quarter of this year, following a 0.7 per cent decline in the first quarter.

However, what is a headache for home owners is welcomed by buyers as well as has been intended by the government which curbed the price acceleration in the property market in the past through several tax and regulatory measures to avid an overheating of the market.

The head of Singapore’s central bank, Ravi Menon, reiterated last month that the city-state does not plan to ease property curbs anytime soon, even as home prices keep falling. That, once more, increases the pressure on developers to offer discounts, payment programmes and other incentives to boost sales.

The curbs included a cap on debt-repayment costs at 60 per cent of a borrower’s monthly income and higher stamp duties on home purchases, after low interest rates and demand from foreign buyers raised concerns prices had risen too far too fast.

The existing stock of unsold homes may take three years to sell, according to Augustine Tan, President of the Real Estate Developers’ Association of Singapore. In addition to the oversupply, home vacancy rates are at their highest in more than 11 years, Tan told Bloomberg News.

While residential homes sales are likely to remain sluggish, international real estate consultants see an uptick in commercial property investments, for example the multi-billion sales of Asia Square Tower 1 and Shunfu Ville earlier this year.

“While 2016 started on a low note, it is expected to end on a high note,” says Tay Huey Ying, Head of Research for JLL Singapore.

“The final lap of 2016 can expect to see the tender closing of the Central Boulevard GLS white site. Other deals potentially in the pipeline include the sale of Capital Square and 77 Robinson Road, just to name a few. Barring unforeseen circumstances, there is a high likelihood that full-year property investment sales value could stage a rebound and hit the highest in three years, surpassing 2014 and 2015,” she added.

Overall, and despite the drop in residential property prices, Singapore remains a high-end housing market in entire Asia. The city was ranked the second-most expensive to buy a luxury home after Hong Kong in the region, according to the 2016 Knight Frank wealth report.

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Singapore home prices dropped for a 12th quarter in a row, extending the longest losing streak on record, with the slow decline accelerating in the third quarter of this year, according to preliminary data from the Urban Redevelopment Authority released on October 3. According to the data, private residential prices fell 1.5 per cent in the three months ended September 30 from the previous quarter, capping the longest series of quarterly losses since 1975 when prices were first published. Overall, private home values have dropped 10.9 per cent from the peak in 2013. Prices dipped by 0.4 per cent in...

Reading Time: 2 minutes

singapore-residential-propertySingapore home prices dropped for a 12th quarter in a row, extending the longest losing streak on record, with the slow decline accelerating in the third quarter of this year, according to preliminary data from the Urban Redevelopment Authority released on October 3.

According to the data, private residential prices fell 1.5 per cent in the three months ended September 30 from the previous quarter, capping the longest series of quarterly losses since 1975 when prices were first published. Overall, private home values have dropped 10.9 per cent from the peak in 2013. Prices dipped by 0.4 per cent in the second quarter of this year, following a 0.7 per cent decline in the first quarter.

However, what is a headache for home owners is welcomed by buyers as well as has been intended by the government which curbed the price acceleration in the property market in the past through several tax and regulatory measures to avid an overheating of the market.

The head of Singapore’s central bank, Ravi Menon, reiterated last month that the city-state does not plan to ease property curbs anytime soon, even as home prices keep falling. That, once more, increases the pressure on developers to offer discounts, payment programmes and other incentives to boost sales.

The curbs included a cap on debt-repayment costs at 60 per cent of a borrower’s monthly income and higher stamp duties on home purchases, after low interest rates and demand from foreign buyers raised concerns prices had risen too far too fast.

The existing stock of unsold homes may take three years to sell, according to Augustine Tan, President of the Real Estate Developers’ Association of Singapore. In addition to the oversupply, home vacancy rates are at their highest in more than 11 years, Tan told Bloomberg News.

While residential homes sales are likely to remain sluggish, international real estate consultants see an uptick in commercial property investments, for example the multi-billion sales of Asia Square Tower 1 and Shunfu Ville earlier this year.

“While 2016 started on a low note, it is expected to end on a high note,” says Tay Huey Ying, Head of Research for JLL Singapore.

“The final lap of 2016 can expect to see the tender closing of the Central Boulevard GLS white site. Other deals potentially in the pipeline include the sale of Capital Square and 77 Robinson Road, just to name a few. Barring unforeseen circumstances, there is a high likelihood that full-year property investment sales value could stage a rebound and hit the highest in three years, surpassing 2014 and 2015,” she added.

Overall, and despite the drop in residential property prices, Singapore remains a high-end housing market in entire Asia. The city was ranked the second-most expensive to buy a luxury home after Hong Kong in the region, according to the 2016 Knight Frank wealth report.

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