Prices of private residential properties in Singapore dipped by 0.7 percent in Q1 2016 from the previous quarter, according to flash estimates released on Friday (1 April) by the Urban Redevelopment Authority (URA).
This is the 10th straight quarter of price decline, and higher than the 0.5 percent fall seen in Q4 2015.
Specifically, landed homes across the island recorded the largest price drop during the period and in Q4 last year. But the rate of decline slowed to 1.5 percent, from 1.8 percent previously.
Nonetheless, Ong Teck Hui, National Director, Research & Consultancy at JLL, feels that the price drop is still quite significant, as it is higher than last year’s average quarterly decline of one percent.
“Landed homes are big-ticket items frequently requiring significant loan amounts, and with the Total Debt Servicing Ratio (TDSR) constraining buyers, the demand pool has shrunk, resulting in heftier price declines.”
As for non-landed homes, prices in the Outside Central Region (OCR) fell by 0.9 percent in the quarter, after holding firm in the previous three-month period.
In the Rest of Central Region (RCR), prices of non-landed properties slid by 0.4 percent, the same rate of change as in Q4 2015. However, Desmond Sim, Head, CBRE Research, Singapore and South East Asia, pointed out that “the RCR registered a double-digit decline of 10.2 percent from the peak in Q2 2013”.
Bucking the trend, prices of non-landed properties in the Core Central Region (CCR) rose by 0.4 percent, following a 3.0 percent decline in the previous quarter.
“The success of Cairnhill Nine was probably the reason behind the slight increase of 0.4 percent in the CCR this quarter,” said Sim.
Ong revealed that transaction prices at Cairnhill Nine averaged around $2,400 psf, and accounted for about a third of the non-landed caveats lodged in the CCR in Q1.
“The robust sales take-up for Cairnhill Nine attests to the underlying pent-up demand which surfaces when buyers perceive an attractive investment opportunity.”
The flash estimates only cover caveats received by the URA until mid-March, and the agency will release the complete statistics four weeks later.
Meanwhile, PropertyGuru’s latest Property Outlook Report revealed that transaction volume in the private housing market is expected to pick up in 2016, as buyers are likely to be lured by better affordability. Prices are expected to fall by two to four percent this year, said the report.
In addition, experts told PropertyGuru that sales of resale homes will increase as the number of new launches remain stagnant.