Singapore home prices fell in the first quarter of this year from the last three months of 2013.
This is according to flash estimates released Tuesday by the Housing and Development Board (HDB), and the Urban Redevelopment Authority (URA).
It is the third straight quarter of decline for HDB resale prices.
The numbers show a 1.5-per cent decline from the last quarter of 2013.
There was also a 1.5-per cent drop recorded in the fourth quarter of 2013.
And in the quarter before, there was a 0.9-per cent fall.
Nicholas Mak, executive director of SLP International Property Consultants, said: “Some of the property curbs the government has implemented, for example, the mortgage servicing ratio, tightening debts for the HDB purchasers…that has also contributed to the decline in demand and prices.
“Another main factor is the steady supply of new HDB flats the government is offering to potential buyers. This has for the past two years been drawing steady demand from the resale market to the HDB primary market.
“Hence we find ourselves in today’s situation, with HDB transaction volume at a low level as well as prices weakening.”
As for the private residential market, prices fell for the second straight quarter.
Preliminary figures showed prices declined 1.3 per cent in the first quarter of 2014, after a 0.9-per cent drop in the previous quarter.
Prices also dropped across all market segments for non-landed private residential properties in the first quarter of 2014.
In the Core Central Region, prices fell for the fourth straight quarter, dropping 1.3 per cent after declining 2.1 per cent in the previous quarter.
The Core Central Region comprises districts 9, 10 and 11, as well as the downtown core region and Sentosa.
At the Outside Central Region, prices fell for the second consecutive quarter, by 0.3 per cent, compared to the 1.0-per cent drop in the previous quarter.
For the Rest of Central Region, prices dropped 2.8 per cent, compared with the 0.4-per cent increase in the previous quarter.
Lim Yong Hock, key executive officer at PropNex Realty, said: “The cooling measures, especially the TDSR (total debt servicing ratio), have this impact across the board, whether it is the OCR (Outside Central Region), RCR (Rest of Central Region) or CCR (Core Central Region).
“For everyone who wants to buy a property, the greatest challenge now is the loan issue. If they are not able to take up the loan, I believe there will be more people who are not able to afford the prices.”
Director of Research & Advisory at Colliers International Chia Siew Chuin said the numbers also show that buyers are drawn to the relatively more affordable mass-market homes.
She said: “Given homebuyers’ persistent price sensitivity and the reduction in their purchase budget under the strict financing rules of the TDSR, prices of mid- to high-end homes in the Rest of Central Region and Core Central Region showed marked declines amid thinning market activity.”
Analysts expect prices in both the private and HDB resale markets to continue to soften.
Some added that the HDB resale market is likely to be affected by the new resale price negotiation procedure, as buyers will tend to be more cautious with their purchases.
Source : Channel NewsAsia – 1 Apr 2014