Singapore Quarterly Home Price Has First Drop in Two Years

Singapore’s fourth-quarter home

prices slid for the first time in almost two years, trimming

annual gains to the smallest since 2008 as mortgage curbs cooled

prices in the Southeast Asian city.

The private residential property price index fell 0.9

percent in the three months ended December, more than the 0.8

percent drop based on preliminary data announced on Jan. 2. The

decline in suburban housing values was 1 percent, more than the

0.6 percent slide in the earlier report, according to a

government statement today.

“The data means that in the last three weeks of December,

the price decline accelerated in the suburban market,” said

Nicholas Mak, executive director and head of research at

property consultants SLP in Singapore. “We have to wait for

another quarter to see if suburban prices continue to weaken,

and if they do, it will set the tone for 2014.”

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.

‘Cooling Measures’

The decline in apartment prices in prime neighborhoods was

2.1 percent in the fourth quarter, according to the statement,

compared with the 2.2 percent decrease in the preliminary

report. Rents fell 0.5 percent in the fourth quarter, the first

drop since the quarter ended Sept. 2009, the data showed.

Housing values gained 1.1 percent in 2013, according to the

statement, the smallest annual increase since prices slid 4.7

percent in 2008.

“The government’s cooling measures have impacted buying

sentiment and the capacity to obtain mortgage loans,” said

Alice Tan, head of consultancy and research at broker Knight

Frank LLP in Singapore.

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.

Private home sales fell to 14,948 units last year from

22,197 in 2012, the data showed. Resale transactions of homes

dropped by half to 6,608 units from 13,214 in 2012.

“There’s some investor fatigue coming in with the hefty

measures,” Mak said. “That will clean off a lot of the

investor demand.”

To contact the reporter on this story:

Pooja Thakur in Singapore at

pthakur@bloomberg.net

To contact the editor responsible for this story:

Andreea Papuc at

apapuc1@bloomberg.net

Singapore Quarterly Home Price Has First Drop in Two Years

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