Singapore’s measures to cool the property sector had a stronger effect on prices in the private housing segment in the third quarter than initially estimated.
Final data released on Friday by the Urban Redevelopment Authority (URA) showed that overall private residential prices rose 2.9 per cent from the second quarter, slowing sharply after a gain of 5.3 per cent in the previous three months.
URA’s initial estimate was for a 3.1 per cent increase in prices in the third quarter.
URA data showed that although prices rose more slowly than in any of the previous four quarters, they still climbed to a new record.
Non-landed properties in the core city centre rose by 1.6 per cent in the third quarter, compared to 5.4 per cent in the second quarter.
Those in the city-fringe area or rest of central region increased 2.3 per cent, compared to 4.6 per cent in second quarter, while in the suburban areas, prices went up 2.2 per cent compared to 5.7 per cent in second quarter.
However, prices of landed properties increased 7.7 per cent in the third quarter, compared with a 6.2 per cent gain in the previous quarter.
“It’s possibly a good time for anyone especially if you’re looking for personal occupation. I think the policy effect has come in to make it a healthier market, so for those looking for a roof over your head and needs to buy a property, I think this is probably a good time to start looking around,” said Dr Chua Yang Liang, head of Research, Southeast Asia, Jones Lang LaSalle.
In the short term, industry watchers don’t expect prices to increase to the 5 per cent levels as seen in the first two quarters of this year. They said that it has reached its peak and that the level is unsustainable.
Going into the fourth quarter of this year, with the full impact of the government’s cooling measures, observers expect private residential property prices to either stay flat or increase by up to two per cent.
Rents of private residential properties rose 3.6 per cent in the third quarter, lower than the 5.9 per cent increase in the April-June period.
New launches and take-up rates were also affected by the cooling measures.
A total of 3,501 uncompleted private homes were launched in the third quarter, down from the 4,180 units in the previous three months.
As many as 3,561 uncompleted private homes were sold last quarter, a drop from the 3,955 units sold between April and June.
The cooling measures that took effect from August 30 require homeowners to pay a three per cent stamp duty on the sale price if they dispose of their properties less than three years after buying them.
Previously, the duty applied to those “flipping” their houses and apartments within a year of purchase.
Property buyers also have to pay more money upfront, with the minimum cash payment doubled to 10 per cent for those already servicing another mortgage.
Source : Channel NewsAsia – 22 Oct 2010