Channel NewsAsia
Updated: 04/02/2013 07:58 | By Channel NewsAsia

Home prices grew at slower pace after cooling measures

Home prices grew at slower pace after cooling measures

Home prices grew at slower pace after cooling measures

SINGAPORE: Prices for both HDB resale flats and private homes grew at a slower pace in the first quarter of the year.

Analysts say the slowdown is no surprise, after the government's latest round of cooling measures in January. 

The resale prices of Housing and Development Board (HDB) flats rose 1.2 per cent in the first quarter of this year over the fourth quarter last year.

HDB said this is the lowest quarter-on-quarter growth in the resale prices of its flats since first quarter 2012.

HDB released its flash estimate of the Q1 2013 Resale Price Index (RPI) on Monday morning.

Chris Koh, director of Chris International, said: "Generally in the first quarter, we have Chinese New Year, commencement of school, so transaction volume and prices tend to be lower during the first quarter. Second reason, I feel, is that coupled with the cooling measures introduced in January, buyers and sellers are a bit jittery and were holding back on the purchases and sales." 

Mr Koh said HDB resale prices are not likely to drop in the coming months. Demand for resale flats remains strong while supply is falling behind as many owners choose to rent out their HDB flats instead of selling, he said. 

In its statement, HDB also said it will offer 4,850 Build-to-Order flats in Choa Chu Kang, Hougang, Jurong West, Sembawang and Woodlands next month.

An additional 3,000 flats will also be launched in a concurrent Sales of Balance Flats (SBF) exercise.

As for private homes, prices moderated in the first quarter of this year, rising 0.5 per cent on average, according to flash estimates from the Urban Redevelopment Authority (URA) Price index.

The 0.5 per cent rise is smaller than the 1.8 per cent growth recorded in the fourth quarter of 2012. 

Analysts said the January cooling measures curtailed an otherwise rapid rise in property prices. 

"The market is still very flush with liquidity in a very low interest rate environment. The measures had an impact in the first two months of its introduction, that is, in the month of January and in particular in the month February when developers did not launch any new projects. If you look at the February numbers, just over 700 units of primary new home sales were done," said Donald Han, special adviser at HSR International Realtors.

Market watchers said prices of high-end properties in the city are expected to stay somewhat flat - up to 1 per cent growth - for the rest of the year. 

But private homes in the suburbs will climb as much as 4 to 5 per cent by the end of the year, as demand is stable and developers continue to dish out projects. - CNA/xq/ir

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