Private residential property prices in S'pore rise 0.4% in Q3

Private residential property prices in S'pore rise 0.4% in Q3

    By Nicole Tan
    POSTED: 25 Oct 2013 10:26
    UPDATED: 25 Oct 2013 23:36

Growth of private home prices slowed in the third quarter. Prices of private residential properties rose 0.4 per cent, lower than the 1 per cent increase recorded in the previous quarter.

SINGAPORE: Growth of private home prices slowed in the third quarter, affected by property loan curbs implemented in June.

According to the Urban Redevelopment Authority (URA), prices of private residential properties rose 0.4 per cent in the third quarter of 2013.

This was lower than the price increase of 1 per cent recorded in the previous quarter, as the cooling measures continue to weigh on high-end and mid-tier private homes.

The mass-market private residential segment was the only one that saw price growth in the third quarter.

Home prices there grew at a slower pace of 2.2 per cent, which contributed to the 0.4 per cent increase in overall private home prices in Q3.

Prices of homes in the city centre dipped 0.3 per cent, while those in the city fringe fell 0.9 per cent -- the first decrease for the region since the first quarter of 2012.

But some analysts said there may be upsides ahead.

Alice Tan, associate director and head of consultancy & research at Knight Frank, said: “We are likely to see more new launches at good locations, and these kind of projects are likely to draw a certain healthy level of interest, (so) prices are likely to be slightly higher than what we see in Q3.”

According to URA, some 107,400 private homes and executive condominium units are expected to be completed in the next three to four years.

Some analysts warn that the strong pipeline of new homes could hurt price growth.

Nicholas Mak, executive director at SLP International, said: "This is actually one of the largest supply that we have seen in the last 20 over years.

“Some of these housing units might actually be bought by investors who are hoping to rent them out, and if our populations are not increasing at that very high rate, what we could see is that rental rates could be depressed and this will in turn lead to even slower price growth, and even stagnate the rate of price increase totally."

In addition, Knight Frank said that concerns over a potential oversupply of private homes could also moderate developers' bids for land sites.

For the fourth quarter, analysts said mass market homes will continue to drive a moderate price increase.

They expect private home prices to grow by between two and three per cent this year.

Meanwhile, rentals of private homes continued to climb for the 16th consecutive quarter, rising by 0.2 per cent in Q3.

- CNA/xq/nd

- wong chee tat :)