Singapore home prices in biggest fall in seven years
Published 06/10/2016 | 02:30
Singapore home prices suffered the biggest drop in seven years, as developers offered discounts amid signals from the government that it won't roll back property curbs initiated in 2009.
An index tracking private residential prices fell 1.5pc in the three months ending September 30 from the previous quarter, the biggest decline since June 2009. Prices fell for the 12th straight quarter, the longest streak of quarterly losses since prices were first published in 1975, according to preliminary data released by the Urban Redevelopment Authority
The head of Singapore's central bank, Ravi Menon, said the city state doesn't plan to ease property curbs, even as home prices have fallen 11pc from a peak in September 2013 and sales have halved.
That's increasing the pressure on developers to offer discounts, payment programmes and other incentives to encourage sales.
"The haemorrhage continues for home prices," said Nicholas Mak, an executive director at SLP International Property Consultants in Singapore.
"The prices could be taking into account the delayed discounts offered in creative marketing by developers, which could be coming in with a lag."
For example, developer OUE Ltd. offers four payment plans for its Twin Peaks condominium project off the prime Orchard Road shopping belt. The most popular of those is the deferred payment programme, where the buyer pays a small amount upfront and the rest over two years.
The existing stock of homes may take three years to sell, according to Augustine Tan, President of the Real Estate Developers' Association of Singapore.
The residential curbs include a cap on debt-repayment costs at 60pc 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.
Apartment prices fell 1.8pc in prime districts in the three months ending September 30, reversing a 0.3pc gain in the previous quarter, the new data showed.
Those in the suburbs slid 1.2pc, while areas near prime districts declined 1.3pc from the previous quarter.
Still, Singapore remains a high-end housing market in Asia, and was ranked the most expensive to buy a luxury home after Hong Kong in the region, according to a 2016 Knight Frank wealth report.