Singapore private property price gain slowsBusiness | 2 Jan 2020 2:10 pm
Private home prices in Singapore increased by just 0.3 percent in the final three months of 2019, further evidence that government cooling measures levied in mid 2018 have taken the heat out of the residential real estate market, Bloomberg reports.
The rise compared with a 1.3 percent increase in the previous quarter, according to a flash estimate by Urban Redevelopment Authority released today.
For all of 2019, apartment prices on the island increased by 2.5 percent, well below a jump of 7.9 percent in 2018.
Singapore introduced cooling measures to slow price increases in early July 2018. They included raising stamp duties for second homes, tightening loan-to-value limits for housing loans granted by financial institutions and making it more expensive for foreigners to enter the market. The curbs, unexpected at the time, didn’t take long to have an impact.
Slower home-price growth could make it harder to work through an apartment glut, however.
The island is grappling with a housing oversupply that some market watchers say may take four years to clear. There are almost 32,000 units -- some finished, others under construction -- in the pipeline.
The central bank said in November that the oversupply threatens to push down property prices. “The increase in the unsold inventory could place downward pressure on prices in the medium term, if unaccompanied by a corresponding rise in demand,” the Monetary Authority of Singapore said in its annual Financial Stability Review.
The relatively small yearly gain signals there “is no excessive exuberance” and prices are likely to stay in line with economic fundamentals and affordability, said Christine Li, head of research for Singapore and Southeast Asia at Cushman & Wakefield. “As such, there is no need for the government to intervene at this juncture, as the market is finding its own equilibrium,” she said.
The slower pace in the fourth quarter was mainly due to a dip in apartment prices in prime districts and in areas located just outside those precincts, others said.
Prices in luxury districts close to the shopping area of Orchard Road and Singapore’s central business district declined by 3.7 percent versus a 2 percent increase in the previous quarter. Christine Sun, head of research and consultancy at OrangeTee & Tie, said price declines at the upper end of the market could be attributed to fewer sales of super-luxury homes.-Photo: Straits Times