Private Home Prices Fall

Source : The Straits Times, Oct 24, 2008

PRIVATE home prices fell faster than expected in the third quarter as the global financial turmoil weighed further on market sentiment.

Singapore releases advance estimates on property prices shortly after the end of each quarter based primarily on transactions during the first 10 weeks of the period. -- PHOTO: THE BUSINESS TIMES

Data released by the Urban Redevelopment Authority on Friday showed that prices slipped by 2.4 per cent. This compares with an initial estimate of 1.8 per cent that was released earlier this month and a 0.2 per cent rise in the previous quarter.

Rentals of private homes, too, fell in the third quarter. The fall was at 0.9 per cent, compared with a rise of 2.5 per cent in the second quarter.

The HDB resale flat market, however, continued its upward push in the third quarter. Prices rose 4.2 per cent, compared with a 4.5 per cent rise in the second quarter.

Resale transactions also edged up 4 per cent to 8,110 cases.

But, reflecting the softening of the property market, the cash-over-valuation (COV) amount of HDB resale transactions fell to $19,000 in the third quarter, from $20,000 in the previous three months.

Cases requiring COV made up 89 per cent of all resale transactions in this quarter, with 11per cent conducted at or below valuation, said an HDB statement on Friday.

Given the weaker global outlook, property consultants are expecting home prices to continue to weaken in the last quarter of the year and 2009.

The fall in private home prices in the three months to Sept marked the first decline in four years amid concerns over the worsening global financial turmoil and coincides with the economy?s descent into recession during the quarter.

News of further weakness in the property sector extended the losses on the Singapore stock market, with the benchmark Straits Times Index falling by over 7 per cent on Friday to a five-year low, in line with the slide in regional markets.

By 2.21pm, the index was 7.55 per cent lower at 1,613.88 points, the lowest level since Oct 2003.

The country's top two property developers CapitaLand and City Developments both fell over 7 per cent, after government data showed third quarter home prices fell a bigger-than-expected 2.4 per cent from the previous quarter.