- POSTED: 24 Jan 2014 12:35
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Singapore's fourth-quarter private home prices fell 0.9 per cent -- the first decline in almost two years as the government's mortgage curbs took effect.
SINGAPORE: Private home prices in Singapore fell in the fourth quarter, under the weight of policy measures and loan curbs.
The private-residential property price index fell 0.9 per cent in October-December to 214.3 points, according to final figures issued by the Urban Redevelopment Authority (URA) on Friday.
This is higher than the initial estimate of a 0.8 per cent drop.
For 2013 as a whole, private-home prices rose 1.1 per cent, compared with a 2.8 per cent rise in 2012.
As the market had expected, private home prices fell in the fourth quarter, hit predominantly by the government's mortgage curbs which were implemented in June 2013.
Private home prices in the core central region continued to moderate, falling 2.1 per cent in the fourth quarter.
Homes in the suburban areas recorded their first price drop since the second quarter of 2009, declining by 1 per cent.
Meanwhile, homes in the city fringe bucked the trend, with a 0.4 per cent growth in prices.
Property agency OrangeTee expects overall private home prices to fall by 2 to 5 per cent this year.
Christine Li, head of research and consultancy at OrangeTee, said: "For 2014, we know that for first half, prices might be flat or even surprise on the upside.
"But for the second half, I think some of the sites are not so attractive as those in the first half, and developers might find it tough to justify a benchmark price for that location, especially for sites not near the MRT stations. So for the second half, for the prices to hold up is a bit challenging."
14,948 new private homes (excluding executive condominiums) were sold in 2013 -- significantly lower than the 22,197 units sold in the previous year.
URA said the sale of 14,948 new homes by developers in 2013 is the lowest since 2009, when developers sold 14,688 new homes.
Analysts expect new home sales this year to be weaker than 2013, at around 12,000 units. That is mainly due to the cooling measures, loan curbs and fewer project launches this year.
Meanwhile, rentals of private homes fell by 0.5 per cent in the fourth quarter -- their first decline since the third quarter of 2009.
For 2013 as a whole, rentals increased by 0.9 per cent, lower than the 2.1 per cent increase in 2012.
Analysts expect rentals to moderate further as more housing units are completed in the coming years.
Nicholas Mak, executive director of SLP International Property Consultants, said: "We could also see the phenomenon of flight to quality. That means as you have more projects that are going to be completed, tenants will have more choices, and as rents come under pressure, some of these tenants may be moving from suburban areas to city fringe areas, while those that can afford higher budgets may be moving from city fringe areas to the prime districts.
"So on the whole, property in the prime districts will probably see stronger rental demand."
According to URA, 19,907 units, including executive condominiums, will be completed in 2014 while 24,153 units will be completed in 2015.
In comparison, about 14,400 units were completed in 2013.