Sin­ga­pore pri­vate home prices fall most in 7 years in Q3

The Sun (Malaysia) - - SUNBIZ -

SIN­GA­PORE: Sin­ga­pore’s pri­vate home prices fell at the fastest pace in seven years in the third quar­ter, as slug­gish do­mes­tic de­mand adds fur­ther pres­sure on the ex­portre­liant econ­omy ahead of a cen­tral bank pol­icy re­view ex­pected later this month.

The pri­vate res­i­den­tial prop­erty in­dex fell 1.5% to 137.9 in the July-Septem­ber quar­ter, ac­cord­ing to a flash es­ti­mate re­leased by the Ur­ban Re­de­vel­op­ment Au­thor­ity (URA), after fall­ing 0.4% in the pre­vi­ous quar­ter.

The lat­est drop was the largest quar­terly de­cline since home prices slid 4.7% in the sec­ond quar­ter of 2009, when fall­out from the global fi­nan­cial cri­sis slammed into Asia and pushed Sin­ga­pore’s econ­omy into con­trac­tion.

“The main rea­son why this time around the drop is steeper is the mar­ket is fi­nally feel­ing the brunt of the eco­nomic slow­down on top of the down­ward pres­sure from the sup­ply spike in 2016, 2017,” said Chris­tine Li, head of re­search for Cush­man and Wake­field in Sin­ga­pore.

In­clud­ing the drop in the third quar­ter, pri­vate home prices have fallen 10.8% from a peak in the third quar­ter of 2013, hav­ing de­clined for 12 straight quar­ters. The price de­clines have come after au­thor­i­ties in­tro­duced a se­ries of prop­erty mar­ket cool­ing mea­sures in re­cent years.

“Va­cancy rates are ris­ing and there is still a large sup­ply. And we think that the non­res­i­den­tial in­dus­trial sec­tor is likely to feel the big­gest head­winds as global trade re­mains weak. So it is not just res­i­den­tial that is feel­ing the pinch,” said Trinh Nguyen, se­nior econ­o­mist for Natixis in Hong Kong.

Cush­man and Wake­field’s Li said an ad­just­ment to the way the URA com­piles the prop­erty price in­dex prob­a­bly added to the fall in the prop­erty price in­dex in the third quar­ter. The change takes into ac­count var­i­ous in­cen­tives and dis­counts that de­vel­op­ers may use to sell prop­erty after they are com­pleted and deli­censed.

Start­ing with the third-quar­ter data, the URA has started in­clud­ing net prices of deli­censed projects in the prop­erty price in­dex data, which is based on all prop­erty sale trans­ac­tion both in the new sale and re­sale mar­ket, a URA spokesper­son said.

“For new sales, the ma­jor­ity of units are sold by li­censed de­vel­op­ers be­fore the projects are com­pleted and deli­censed. A small per­cent­age of all prop­erty sales is from com­pleted deli­censed projects,” the URA spokesper­son said. – Reuters

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