But analysts do not expect prices to tumble, noting developers’ high land bid costs
The upward march of private home prices in recent months ground to a virtual halt in the third quarter in the wake of the surprise July 6 property cooling measures, according to flash estimates out yesterday.
Prices inched up 0.5 per cent in the July to mid-September period, a sharp slowdown from the 3.4 per cent jump in the second quarter and the 3.9 per cent increase in the first. “The new measures have put the brakes on rising home prices in the third quarter,” said Ms Tricia Song, Colliers International’s head of research for Singapore.
“That said, the 0.5 per cent increase… was still quite decent, (compared with) a 0.4 per cent rise in third quarter of 2013” after the total debt servicing ratio revision took effect in June that year, she added.
Non-landed home prices rose just 0.2 per cent against a 3.2 per cent gain in the second quarter, according to the estimates from the Urban Redevelopment Authority (URA).
Prices of landed properties rose 1.7 per cent, well down on the 4.1 per cent rise in the second quarter.
Prices appeared more resilient in the prime districts or core central region, with condominium and private apartment prices up 1.2 per cent compared with a 0.9 per cent increase in the second quarter.
Ms Song said price growth in prime districts was likely driven by 8 St Thomas and Wallich Residence. “In the third quarter, 8 St Thomas sold 20 units at a median price of $3,226 per square foot (psf), while Wallich Residence sold 11 units at a median price of $3,531 psf, 8 per cent higher than the median price of $3,283 psf achieved in the second quarter,” she noted.
Prices in the city fringes or rest of central region fell 0.8 per cent after a 5.6 per cent jump in the previous quarter.
Ms Song pointed to “selected projects clearing inventory at a discount, such as The Poiz Residences, which sold 16 units at $1,320 psf. The Tre Ver, a new launch, also sold well at a lower-than-expected price of $1,553 psf”.
Three other city fringe projects – The Verandah Residences, Margaret Ville and Amber 45 – were “launched at median prices above $1,800 psf in the second quarter, but launches in the third quarter were below that level”, noted Mr Ong Teck Hui, national director of JLL Research & Consultancy.
He said the July cooling measures “arrested price increases in existing new projects, moderated new launch prices and tempered asking prices in the resale market as well”.
Prices in the suburbs or outside central region edged up 0.1 per cent, after rising 3 per cent in the previous quarter.
“Riverfront Residences, which had a median price of $1,309 psf, and accounted for about 72 per cent of new sale transactions in the suburbs, had a significant impact on prices there,” Mr Ong said.
Private home prices were up by 7.9 per cent in the first nine months of the year, going by URA’s private residential property price index.
PropNex Realty chief executive Ismail Gafoor said: “We do not expect prices to tumble because property developers are ‘locked’ in by the high land bid costs.”
ERA Realty key executive officer Eugene Lim said it is “not the Government’s intention to stop property prices from increasing, but for prices to grow at a sustainable rate”. He also said investors considering suburban and city fringe properties are “likely to take more time to re-evaluate, as the additional 5 per cent in additional buyer’s stamp duty and lowered loan quantum are sizeable… considerations”.
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