The quarter-on-quarter drop of 0.3 % in URA’s overall private home price index, based on its Q2 flash estimate released on Monday, follows a 0.4 % decline in the index in Q1. The 0.3 % fall in the second quarter is the smallest of the 15 quarters since the peak in Q3 2013. The general sentiment among the property circles is that the private housing market is close to its trough given the statistics.
The Urban Redevelopment Authority’s overall private home price index is expected to start increasing next year, as projects on sites bought at high land prices come to the market.
The market is bottoming out with the cooling measures expected to stay put. While private home sales volumes are expected to remain healthy, the price index is expected to flatline, while the affordability in terms of absolute price quantum is expected to remain the key driver for sales volume – given the current muted market sentiment amid soft economic growth, and policy conditions.
The Monetary Authority of Singapore’s comments last week that the “calibrated adjustments” in March to the seller’s stamp duty and TDSR do not signal the start of an unwinding of the property cooling measures.
Based on its Q2 flash estimate, URA’s overall private home price index has slipped 11.8 % from the recent peak in Q3 2013.
URA’s data also showed that prices of non-landed private residential properties in the Core Central Region (CCR) or prime areas fell by 0.9 % in Q2, after easing 0.4 % in Q1. In the city fringe or Rest of Central Region (RCR), prices rose 0.5 %, after registering an increase of 0.3 % in the previous quarter. Prices in the suburbs or Outside Central Region (OCR) retreated 0.4 %, after inching up 0.1 % in Q1.