http://www.straitstimes.com/archive/...ip-q2-20140702

Home prices continue to dip in Q2

Published on Jul 2, 2014 3:19 AM

By Melissa Tan


HOME prices fell further in the second quarter and threaten to keep declining, although discounting by developers in recent months has managed to slow down the fall.

Flash estimates out yesterday show that prices of Housing Board (HDB) resale flats and private homes weakened in the three months to June 30.

HDB resale values dipped 1.3 per cent from the previous quarter, following a 1.6 per cent fall in the first. They have now slid for four quarters in a row.

It was the same for private homes: Prices sank 1.1 per cent in the second quarter after losing 1.3 per cent in the first, making three quarters of decline in a row.

Analysts say competitive prices lured buyers back to the market in the second quarter, which could explain why the rate of price decline for both sectors was slightly less than in the first three months of the year.

They added that private home prices will likely fall by 1 to 2 per cent for each of the next two quarters or more as developers keep dangling discounts for buyers.

Relief will come only when some property market cooling measures are relaxed, they said.

"I don't expect the market to bottom out soon unless policies are tweaked to bring in more buyers," said OrangeTee research head Christine Li, who thinks prices will not fall by more than 5 per cent over the course of this year.

"The growing supply in terms of newly completed projects should continue to weigh down prices in the next few quarters."

JLL Singapore research director Ong Teck Hui added that developers' price cuts "raise buyers' expectations of further discounts and this feeds into a downward price cycle as we are seeing, albeit a gentle one, currently".

The pace of the private market slowdown in the second quarter deepened on all parts of the island except the city fringe, according to Urban Redevelopment Authority figures yesterday.

The city centre was hit hardest, with values falling 1.5 per cent in the second quarter - a much steeper drop than the 1.1 per cent slide in the first quarter.

The suburbs also put in a poor showing, posting a 1.1 per cent drop in the April to June period. This was far sharper than the 0.1 per cent dip in the first quarter.

City-fringe prices slipped 0.6 per cent in the second quarter following a 3.3 per cent dive in the preceding three months.

Housewife Lee Ching Lan, 51, said attractive pricing was a key factor in her buying a three-bedder at the Sky Habitat condominium in Bishan in April.

But the overall slowdown has worried some home seekers. "I'll be more conservative now as I'm afraid that after I buy something, prices will drop further," said property investor Vina Ip, 41.

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