Private property prices continue to moderate
by Tan Weizhen 04:47 AM Jan 04, 2012
SINGAPORE – Despite the property market still not feeling the full impact of the latest cooling measure, flash estimates showed prices of private homes were almost flat – rising by just 0.2 per cent – between October and December last year.
In a press release yesterday, the Urban Redevelopment Authority noted: “The rate of increase in private residential property prices has continued to moderate for the ninth consecutive quarter”. The 0.2-per-cent increase in the fourth quarter was in contrast to a 1.3-per-cent rise in the previous quarter.
With buyers adopting a wait-and-see attitude, property analysts Today spoke to pointed out that the estimates do not reflect the impact of the recent cooling measure, which has been described as the harshest yet.
Which is why some of them felt that prices of private homes could fall – for the first time since 2009 – in the coming months.
An increased supply of private homes, coupled with the impact of the cooling measure, could see private home prices fall by about 3 per cent in the year ahead, said Propnex CEO Mohamed Ismail.
However, Orange Tee director of research and consultancy Tan Kok Keong told Today that he expects prices to fall by between 1 and 2 per cent at most between January and March.
On Dec 7, the Government announced additional buyer’s stamp duties (ABSD) which will be imposed in addition to the existing tax. Foreigners and corporations will be hardest hit, with a 10-per-cent ABSD imposed on any private homes they buy.
While the indications are that private home prices are stabilising, analysts noted that the fourth quarter is the traditional lull period for the property market.
According to the URA, its flash estimates are compiled “based on transaction prices given in caveats lodged during the first 10 weeks of the quarter supplemented by information on the number of new units sold by developers”.
The statistics will be updated next month, when more data on the caveats lodged and the take-up of new projects are captured.
The URA said: “Past data has shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution.”
SLP International research head Nicholas Mak said the revised figure would likely vary by between 0.1 and 0.2 per cent.
He said: “But if the final figures are low, it’s hard to tell if it is a direct impact from the ABSD. There are other factors such as the euro zone crisis and the Singapore economy.”
He added: “The ABSD alone will not cause prices to drop, as it does not eliminate demand. Singaporeans and permanent residents, who are not so affected by the new measure, will sustain demand and hence prices.”
Concurring, Chesterton Suntec International research and consultancy head Colin Tan said buyers should not hold their breath for prices to drop.
He said: “So long as we have slow growth or at least positive growth, so long as employment holds up, I think we do not expect prices to correct anytime soon.”
Source : TODAYonline – MediaCorp Press Ltd’s copyright
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