- POSTED: 02 Jan 2014 12:44
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Singapore's bid to tame the red-hot property market is showing signs of cooling. Private home prices fell 0.8 per cent in the fourth quarter of 2013 from the previous three months, its first decline in nearly two years.
SINGAPORE: Singapore's bid to tame the red-hot property market is showing signs of cooling.
Private home prices fell in the fourth quarter of 2013 from the previous three months, its first decline in nearly two years.
Preliminary data by the Urban Redevelopment Authority (URA) showed the private residential property price index fell 0.8 per cent in the October-December period to 214.5 points.
This ended six straight quarters of price growth, including a 0.4 per cent increase in the third quarter and a 1.0 per cent rise in the April-June quarter.
Prices last fell in the first quarter of 2012.
For the whole of 2013, private home prices increased by 1.2 per cent, slower than the 2.8-per cent rise in 2012.
Analysts said prices have been hit by the slew of cooling measures and loan curbs implemented last year.
In addition, some projects were also launched at lower prices in the fourth quarter, such as Duo Residences in Bugis.
In the Core Central Region (CCR), prices fell 2.2 per cent in the fourth quarter, significantly more than the 0.3 per cent drop in the third quarter.
Prices in the Outside Central Region (OCR) fell 0.6 per cent - the first decline since the second quarter of 2009. This is in contrast to the 2.2 per cent increase in the third quarter.
In contrast, prices in the Rest of Central Region (RCR) rose 0.8 per cent - a reversal of the 0.9 per cent decrease seen in the previous quarter.
For the first quarter of 2014, some analysts are expecting home prices to moderate further in some segments.
Alice Tan, associate director and head of consultancy & research at Knight Frank, said: "For the high-end segment, the CCR, I envisage that prices wold decline by around 0.5 per cent for first quarter. As for the city fringe homes in the RCR, I see that there could be further potential upside of around 0.2 per cent increase for the first quarter this year.
"As for the mass market segment, given the rising pressure to secure loans, especially from the HDB upgraders and middle-income buyers, it would be harder for developers to price at a certain level, so... OCR private home prices could decline by 0.3 to 0.5 per cent."
Analysts added that the existing measures and curbs, as well as the increasing supply of new homes in the pipeline, will put pressure on prices this year.
And developers are likely to adjust their prices to move units.
Chia Siew Chuin, director of research and advisory at Colliers International, said: "The potential group of upgraders from the HDB market is also expected to continue to reduce under the weight of falling resale prices in the HDB market, plus there is still a concern about rising interest rates, so all these given together could dampen demand.
"At the same time, we would also expect to see supply coming on over the next few years, putting pressure on prices."
Overall, analysts expect private home prices to continue to moderate this year. Knight Frank still expects a 1 per cent price increase in 2014, but other market watchers are more bearish. They expect private home prices to fall by between 2 and 5 per cent in 2014.
However, with a healthy economic outlook and tight labour market, analysts said there won't be any panic selling just yet.