- Prices fell 0.7% in 1Q, posting 10 quarters of declines
- Residential values are down 9% from peak in September 2013
Singapore home prices dropped for a tenth quarter, posting the longest losing streak in almost two decades, as tighter mortgage curbs cooled demand in Asia’s second-most expensive housing market.
An index tracking private residential prices fell 0.7 percent in the three months ended March 31 from the previous quarter, matching the longest series of losses since 1998, according to preliminary data from the Urban Redevelopment Authority on Friday.
The government has signaled it is reluctant to lift property cooling measures it began introducing in 2009, for fear it will lead to overheating in the market again. It is too early to relax the cooling measures, as doing so could result in a market rebound, National Development Minister Lawrence Wong said in a written reply to parliament on Feb. 29. Finance Minister Heng Swee Keat reiterated that view in his budget speech on March 24, saying it was “premature” to relax the curbs.
“Prices will continue their slide this year as the government has said it’s too early to remove the curbs,” said Nicholas Mak, an executive director at SLP International Property Consultants in Singapore. Mak estimates prices could decline from 2 percent to 5 percent in 2016.
The residential curbs have included a cap on debt-repayment costs at 60 percent of a borrower’s monthly income and higher stamp duties on home purchases, after low interest rates and demand from foreign buyers raised concerns prices had risen too far too fast.
Home values have dropped 9 percent from the peak in 2013 and sales have since declined to about half the level that year.
Developers remain hopeful that some measures will be eased this year. Kwek Leng Beng, the billionaire executive chairman of City Developments Ltd., which built luxury condominiums such as the St. Regis Residences near the Orchard Road shopping belt, said in February he is expecting the government to remove stamp duties on home purchases.
The government needs to calibrate the cooling measures to engineer a soft landing, the Real Estate Developers’ Association of Singapore President Augustine Tan said in February.
Apartment prices rose 0.4 percent in prime districts in the three months ended March 31, the first quarterly increase since the quarter ended Dec. 2014, the data showed. Those in the suburbs slid 0.9 percent, while areas near prime districts declined 0.4 percent from the previous quarter.
Still, Singapore remains a high-end housing market in Asia. The city was ranked the most expensive to buy a luxury home after Hong Kong in the region, according to a 2016 Knight Frank wealth report.