Prices of private homes dropped by one percent in Q2 2014, following the 1.3 percent decline in the previous quarter, according to the Urban Redevelopment Authority (URA) today.
This marks the third straight quarter of price decline.
Price decline was observed across all segments of the private residential property market.
Prices of non-landed properties in the Core Central Region (CCR) declined by 1.5 percent, following the 1.1 percent decrease in the previous quarter.
The Rest of Central Region (RCR) recorded a decline by 0.4 percent, after decreasing by 3.3 percent in the previous quarter.
In Outside Central Region (OCR), prices declined by 0.9 percent, significantly more than the 0.1 percent decline in the previous quarter.
JLL said in a statement the moderation in decline of the private property price index and the number of units sold by developers in Q2 show that the residential market has adjusted to the effects of the TDSR and is slowing but in a stable manner. “This is a balanced outcome as transactions have moderated significantly from pre-TDSR levels, with prices easing gradually.”
Prices of landed properties declined by 1.7 percent, significantly more than the decrease of 0.7 percent in the previous quarter.
The combination of Additional Buyer’s Stamp Duty (ABSD) and Total Debt Ratio (TDSR) framework has severely affected buyers’ affordability, said Christine Li Head of Research & Consultancy at OrangeTee.
“As such, prices of landed homes not only declined at a faster pace in Q2, they also underperformed non-landed homes. Buyers have also grown to be more price- and quantum-sensitive, resulting in low volume of transactions in this segment. Only 285 units were transacted in Q2, down from 483(-41% y-o-y) a year ago, going by URA caveats data,” she said.
With the MAS yesterday reiterated that the government has no intention to ease cooling measures soon, Li thinks the landed segment should continue to lag behind the non-landed segment.
Rentals also fell by 0.6 percent in Q2 2014, compared with the 0.7 percent decline in Q1 2014.
Chia Siew Chuin, Director of Research & Advisory at Colliers International partly attributed this to the level of net new supply of home units outstripping net new take up for the fifth consecutive quarter. “According to the URA’s statistics, the net new supply reached 4,715 completed units in 2Q 2014, the last time the net new supply exceeded the 4000-mark was in 2Q 2000. This exceeded the corresponding net new take-up of 2,731 units by 72.6 percent.”