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Monday, April 2, 2012

S'pore home prices suffer 1st quarterly drop in 3 years

SINGAPORE, April 2 (Reuters) Singapore's private home prices suffered their first quarterly drop in nearly three years as government measures to cool the property market begin to bite at the high end.

According to advance estimates from the Urban Redevelopment Authority (URA) on Monday, private home prices fell 0.1 percent in JanuaryMarch from the last three months of 2011. It was the first decline since the second quarter of 2009.

Prices of nonlanded private residential properties in the core central region fell by 0.9 percent, reflecting weakness in the high end of the property market. The mass market remained healthy as prices of apartments outside the central region rose by 1.2 percent from the preceding quarter.

"I don't think this decline is sufficient to say policies put in place have worked as the sheer volume of sales warrants some concerns," said Wilson Liew, an analyst at Maybank Kim Eng.

He said the fall in private home prices was partly due to most of the launches in the first quarter being cheaper mass market projects. Liew expected prices to soften further towards the end of the year.

Singapore is trying to cool home prices amid fears of a property bubble and public discontent over soaring prices.

The government last introduced measures to curb residential property prices in December, including a requirement that foreigners who are not permanent residents pay an additional stamp duty equal to 10 percent of the property value.

But while prices have softened at the high end of the market, transaction volumes remain healthy, especially in the mass market.

Property blue chips reacted calmly to the news, with Southeast Asia's biggest developer, CapitaLand, slipping 0.3 percent and City Developments declining about 1 percent percent.

Among secondliners, Wing Tai Holdings lost 0.4 percent while SC Global dropped 0.9 percent. The benchmark Straits Times Index gained less than 0.1 percent.

"The risk of having another round of measures is higher than it was one, two months back," Png Poh Soon, head of consultancy and research at Knight Frank, said last week.

"Sales transactions are going up, homes are getting smaller, the psf (per square foot) rate is going up." Png predicted prices for highend prime residential units may fall up to 5 percent this year, he said.

Separately, an index of resale prices for governmentbuilt HDB apartments showed prices edged up 0.6 percent in the first quarter from the preceding three months, slowing from a rise of 1.7 percent in the fourth quarter.

By The Star

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