Singapore private home prices registered a third straight quarter of slower grow, rising just 0.4 per cent between April and June, in a further sign that a four-year boom in the republic's housing market has peaked.
Private home prices rose 3.7 per cent in the first quarter of 2008, after soaring 31 per cent in 2007 amid a housing boom fuelled partly by strong growth in the Singapore economyThe rise in the index was the smallest since the middle of 2004, underlining a fall in home sales as slowing economic growth and rising inflation dampen confidence in the real estate market.
'It's starting to turn into a buyers' market, as developers hold off on launches while homebuyers look for bigger discounts,' said Nicholas Mak, research head at property consultants Knight Frank in Singapore.
The Urban Redevelopment Authority (URA) said on Tuesday that early estimates showed its price index for private residential properties rose to an unadjusted 177.9 points for the three months ended June from 177.2 at the end of March.
The 0.4 per cent increase marks a sharp slowdown from a rise in the index of 3.7 per cent in the first quarter of the year.
However, from a year earlier, the index was still up 20.4 per cent. House prices jumped 31 per cent in 2007.
The slowing housing market puts further pressure on developers such as CapitaLand , Keppel Land and City Developments , already been hit by a fall in private home sales to a five-year low in the first quarter.
Sales improved, however, in April and May as some developers cut prices.
The weakening property sector is a risk for local banks, which rely on building, construction and home loans for about 45 per cent of lending, data from the Monetary Authority of Singapore shows.
Price increases for the mainly high-end homes within the core central region of the island saw the greatest moderation as foreign investors, who make up about half of the buyers in the segment, sought safer investments in other markets, Mr Mak said.
But demand from Singaporeans for cheaper housing continued to be relatively strong during the April-June period.
In a separate release, the government said resale prices for government-built flats, home to over 80 per cent of Singaporeans, gained an estimated 4.4 per cent in the April-June period, compared with a 3.7 per cent rise in the first quarter.
The advance estimates are compiled from transaction prices lodged during the first 10 weeks of the quarter as well as data from new apartments that have been booked. The URA will release the official price index in four weeks. -- REUTERS
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