Commercial and residential buildings stand in Singapore.
Commercial and residential buildings stand in Singapore. Close
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Photographer: Brent Lewin/Bloomberg
Commercial and residential buildings stand in Singapore.
Singapore’s fourth-quarter home
prices slid for the first time in nearly two years, trimming
annual gains to the smallest since 2008 as housing loan curbs
cooled prices in Asia’s second-most expensive housing market.
The island-state’s private residential property price index
fell 0.8 percent to 214.5 points in the three months ended Dec.
31, after it added 0.4 percent in the third quarter, according
to preliminary figures released by the Urban Redevelopment
Authority today. The index drop was the first since the first
quarter of 2012. Prices increased by 1.2 percent in 2013, lower
than the 2.8 percent gain in 2012, the data showed. That’s the
smallest annual increase since prices slid 4.7 percent in 2008,
the data showed.
Record home prices amid low interest rates raised concerns
of a housing bubble and prompted the government to widen a
campaign that started in 2009 to curb speculation in the
property market. Singapore unveiled new rules in June governing
how financial institutions grant property loans to individuals,
in addition to previous curbs including new taxes and higher
down-payments.
“The loan measures have been very effective, it has cut
off financing for home purchases,” said David Neubronner,
national director at broker Jones Lang LaSalle Inc.’s
residential project sales in Singapore. “The government has
achieved what it set out to do.”
Home prices could decline as much as 10 percent this year,
Neubronner said, adding that he doesn’t expect further measures
from the government.
Shares Rise
The index tracking 50 property-related stocks in the city
rose 0.6 percent to 711.63 as of 9:25 a.m. in Singapore trading
today. The gauge fell 10 percent last year, compared with a 48
percent increase in 2012.
The new loan framework requires that lenders take a
borrower’s debt into consideration when granting mortgages, the
Monetary Authority of Singapore said June 28. Home loans should
not lead to a borrower’s total debt-servicing ratio rising above
60 percent and those that do will be considered imprudent, it
said.
Mortgage loan growth at 11.9 percent in October was at the
slowest pace since Aug. 2009, data compiled by Bloomberg based
on MAS figures showed.
Apartment prices fell 2.2 percent in prime districts in the
fourth quarter after sliding 0.3 percent in the previous three
months, the URA data showed. Those in the suburbs slid for the
first time since June 2009, falling 0.6 percent, compared with a
2.2 percent gain in the previous quarter, according to the data.
Economy Shrank
Singapore’s economy shrank for the first time in five
quarters in the three months to Dec. 31. Gross domestic product
fell an annualized 2.7 percent in the period from the previous
quarter, when it expanded a revised 2.2 percent, the trade
ministry said in a statement today. Singapore’s construction
industry contracted 6.9 percent, the data showed.
Home sales rose 13 percent in November from a year ago, as
developers marketed new projects, ending four months of
declines. Sales rose to 1,228 units compared with 1,087 in
November 2012, according to data from the Urban Redevelopment
Authority released last month.
Sales of new private homes could drop to 15,000 units in
2013 from 22,197 in 2012, according to Desmond Sim, associate
director at CBRE Research.
To contact the reporter on this story:
Pooja Thakur in Singapore at
pthakur@bloomberg.net
To contact the editor responsible for this story:
Iain McDonald at
imcdonald7@bloomberg.net
Singapore Home Prices Post First Decline in Seven Quarters
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