Resale private home prices jump as curbs lose effect

Resale prices of completed non-landed private homes surged 1.9 per cent last month from March, extending the 1.1 per cent rise in the previous month, according to Singapore Residential Price Index (SRPI) flash estimates released yesterday, calling into question the effectiveness of the seventh round of property market cooling measures.

The SRPI, compiled by the National University of Singapore’s (NUS) Institute of Real Estate Studies, showed prices rose across the board, with those of homes in the non-central region leading gains with a 2.4 per cent jump that reversed the 0.2 per cent decline in the previous month.

Prices of homes in the central region rose 1.3 per cent, building on the 2.8 per cent gain previously, while those of small units — with areas below 506 sq ft — were up 1.8 per cent, adding to the 0.8 per cent rise in March, the SRPI data showed.

The Government has introduced seven sets of measures since 2009 to cool the runaway housing market, the latest round being in January that included higher additional buyer stamp duties, lower loan-to-value-ratios and larger down payments.

The NUS Institute of Real Estate Studies said: “As with earlier policy measures, the latest cooling package announced in January apparently had only a temporary effect on the trajectory of housing prices.”

“Transaction volume actually increased in January 2013 from December 2012, and was partly triggered by the announcement of further tightening measures on Jan 11, 2013. Home buyers brought forward their purchases to avoid the imposition of additional transaction costs and lowered financing limits,” it said.

“Transaction volume and prices fell in February but have recovered since then, with the overall SRPI buoyed by the strength of the housing market in the non-central region … It is unclear that the seventh instalment of the cooling measures, described as the most comprehensive to date, has had the desired impact of mitigating house price inflation,” it added.

Source : Today – 29 May 2013

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