Home Prices More Affordable Compared to Last Peak

SINGAPORE – Private property prices are estimated to have weakened faster in the third quarter of this year, with steeper declines across all market segments.  “With the Total Debt Servicing Ratio still in place, buyers continue to be limited in their ability to purchase properties of larger price quantums. This exerts continued downward pressure on prices as buyers are unable to take out larger loans.” Mortgage Servicing Ratio is applicable to executive condo such as The Terrace EC and Waterwoods EC.

Prices fell about 1.3 per cent in the third quarter over the second quarter, according to flash estimates from the Urban Redevelopment Authority (URA) on Thursday (Oct 1).

This followed a 0.9 per cent decline in the second quarter and is the fastest pace of quarterly decline seen in the last two years, following the last round of cooling measures in June 2013.

executive condo shift in policy

The estimated price fall was in line with expectations, as analysts have forecast prices to fall by 4 to 6 per cent for the full year.

Private home prices have fallen for eight straight quarters and are down 8 per cent from their last peak in the third quarter of 2013.

The price fall in the third quarter was across all market segments.

Prices in the central region fell an estimated 1.3 per cent, more than the 0.6 per cent fall in the second quarter.

Prices in the city fringes fell 1.5 per cent, more than the 0.6 per cent fall in the previous quarter.

Prices in the suburbs were again down the most with an estimated decline of 1.6 per cent, compared with the 1.1 per cent decline in the second quarter. This location saw the largest correction this quarter largely because of the contribution in sales from High Park Residences, whose units were on the smaller side, making them more affordable.

The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and survey data on new units sold by developers during the first ten weeks of the quarter, URA said.

The statistics will be updated four weeks later when URA releases the full real estate statistics for the third quarter.