Luxury home prices in Singapore experienced their greatest fall in seven years in the third quarter, having been in a slow decline for 12 consecutive quarters.
This is the longest streak of quarterly losses in the private home market to date, according to preliminary data from the Urban Redevelopment Authority’s (URA) private residential property index.
Flash estimates published by URA revealed a drop of 2.1 points from 140.0 in the second quarter to 137.9 points. This translates into a 1.5 percent decline between July to September from the last quarter, and a 10.8 percent decrease from the previous peak, which occurred in the third quarter of 2013.
The drop comes in the face of dampening factors including a slowing economy and weakened buyer sentiment. A report published by Channel NewsAsia last month revealed that the country’s overall unemployment rate had risen from 1.9 percent in March to 2.1 percent in June for Q2.
Plans to continue market cooling measures – which have been in place since 2011 – are also a source of downwards pressure in the private property market.
“It’s too early to lift the property cooling measures because we want to make sure that the gains we have made painstakingly over the last one to two years are entrenched, that we are on a sustainable path for the property market,” said Managing Director for the Monetary Authority of Singapore (MAS) Ravi Menon in a Today report published earlier in July.
Price curbs such as the Additional Buyer’s Stamp Duty (ABSD) can add as much as 15 percent to purchase prices for Singaporean and foreign purchasers who own more than one property. The price drop was also partly attributed by market experts to a change in how the URA calculates its private-property price indices. The authority announced last month that it would exclude incentives and discounts offered by developers of de-licensed private projects for the first time when calculating its quarterly price index for Q3.
Visit Channel NewsAsia for the full report.