Singapore home prices extend decline on government curbs
Prices have fallen for a record 15th quarter as the central bank said last week it was not the right time to ease cooling measures
Singapore home prices fell in the quarter ended June, extending the drop in property values to a record 15th quarter as most measures to cool the market remain in place despite a slight easing in March.
An index tracking private residential prices fell 0.3 per cent in the three months ended June 30 from the previous quarter, according to preliminary data from the Urban Redevelopment Authority released Monday. The almost four-year decline in prices is the longest since the data was first published in 1975.
Singapore’s leaders, determined to keep a lid on home prices in the city-state, have unleashed a series of measures to cool the market since 2009.
The government in March rolled back some property-market restrictions for the first time in eight years, although it has cautioned that those adjustments don’t signal an unwinding of the measures.
“We don’t expect a recovery in prices this year – even though we have seen some improvement in market sentiment – as the central bank has indicated it won’t be easing curbs anytime soon,” said Nicholas Mak, head of research at SLP International Property Consultants in Singapore.
“We will continue to see a small gradual decline in prices for the rest of the year.”
Prices in prime areas declined 0.9 per cent in the quarter, while suburban homes were 0.4 per cent lower in the three months ended June, the data showed.
In March, the government reduced stamp duty imposed on sellers and some mortgage restrictions.
That helped stoke optimism that Singapore’s property market is rebounding, with home sales jumping and developers making more aggressive bids at land auctions.
Home sales in the first five months this year have risen about 75 per cent from the same period a year ago, data showed.
While the property market has stabilised, it is “not time yet to ease the cooling measures. They remain necessary,” Ravi Menon, managing director of the Monetary Authority of Singapore, told reporters on June 29 at the release of the bank’s annual report.
Mortgage rates are very low and “the risk of a renewed unsustainable surge in property prices is not trivial,” he said last week.
“Demand was already on the upswing before the easing of the measures in March 2017, driven by more attractive prices and a perception that the market is closer to the bottom,” said Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle Inc.
The announcement from the central bank “would, however, temper unrealistic expectations of some buyers so that they will not be carried away by exuberance and be more measured in their purchasing decisions.”