PRIVATE home prices sunk 5.7 per cent in the fourth quarter of 2008, marking the steepest drop in a decade as the deepening economic crisis continues to dampen homebuyer sentiment.
Homes in prime areas registered the biggest price fall, with apartments in the core central region declining 6.3 per cent compared with a drop of 4.7 per cent in outlying areas. -- ST PHOTO: TAN SUAN ANNFollowing a 2.4 per cent drop in the third quarter, home prices have now declined for two straight quarters, ending a four-year property rally in Singapore.
Prices fell 4.3 per cent in 2008 overall, compared to 2007, based on flash estimates released by the Urban Redevelopment Authority (URA) on Friday.
This is a dramatic turnaround from the 31.2 per cent spike in home prices in 2007 at the peak of the spectacular bullrun.
Despite the freefall in private home prices, new HDB data on Friday showed HDB flats continue to buck the trend, climbing 1.5 per cent in the fourth quarter - following a 4.2 per cent increase in the third quarter.
This means Housing Board (HDB) resale flat prices have reached a new peak since the last historical high in 1996.
Prices rose 13.8 per cent in 2008, adding to 2007's 16.5 per cent increase.
Analysts say the drop in private home prices - the largest since the last quarter of 1998 - is proof that 'fire sales' have started as sellers look to exit the market and raise cash flow amid an economic recession.
The Government warned on Friday that the economy may shrink by as much as 2 per cent this year, after posting a 12.5 decline in gross domestic product (GDP) in the October-December quarter - the third consecutive quarter of GDP decline.
Prices for apartments in the core central area dropped 6.3 percent in the three months ended Dec 31, and slipped 5.5 per cent in the rest of central region.
Outside the central region, prices slid 4.7 per cent.
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