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Singapore Home Prices Post Steepest Drop in Decade
By Chen Shiyin
Jan. 2 (Bloomberg) -- Singapore’s fourth-quarter private home prices declined 5.7 percent, the steepest drop in a decade, as the global financial crisis and an economic recession deterred buyers.
The price index of private residential property fell to 163.4 points in the three months ended Dec. 31, from 173.30 in the previous quarter, the Urban Redevelopment Authority said in a statement on its Web site today. That’s the largest drop since the three months ended Dec. 31, 1998, according to data tracked by Bloomberg.
Home prices have retreated for two straight quarters, ending a four-year rally. The island-state said today its economy may shrink by as much as 2 percent this year, the first contraction since 2001, amid a worsening global recession and as writedowns and credit losses in the financial crisis topped $1 trillion.
“With all the bad news coming out on Wall Street, those who want to sell would need to do so at a fairly distressed price and buyers would only be willing to purchase at a fairly attractive price,” said Ong Choon Fah, Singapore-based regional head of research at DTZ, a property consulting firm. “That’s why the number of transactions dropped dramatically during the fourth quarter and we certainly expect the first quarter to remain slow.”
Prices for apartments in the so-called core central area dropped 6.3 percent in the three months ended Dec. 31 and slipped 5.5 percent elsewhere in central Singapore, according to the Urban Redevelopment Authority. They fell 4.7 percent across other parts of the island, today’s report showed.
CapitaLand, City Developments
The data is based on transactions in the first 10 weeks of the quarter, the government agency said. It will provide an update in four weeks.
CapitaLand Ltd., Southeast Asia’s largest developer, rose 4.8 percent to S$3.26 at 2:35 p.m. in Singapore trading. The shares dropped 50 percent last year, its largest loss on record. Keppel Land Ltd., the third-biggest, climbed 4.7 percent to S$1.78.
City Developments Ltd., Singapore’s second-largest real estate company, added 3.8 percent to S$6.61. The developer said on Nov. 13 it would delay selling homes at new residential projects “for the time being” amid the weakening property market and global slowdown.
“Developers in general have not made very significant changes to their prices and there’s the view that some of them are waiting to ride out the slowdown,” DTZ’s Ong said.
The government agency said on Dec. 19 about 10,450 unfinished homes were sold under a deferred mortgage plan that allowed buyers to postpone taking out loans equivalent to as much as 90 percent of the property values until they were completed.
Some of those homes may be at risk of default or so-called distressed sales if prices decline further, analysts at brokerages including CLSA Ltd. have said.
To contact the reporter on this story: Chen Shiyin in Singapore at [email protected].
Last Updated: January 2, 2009
By Chen Shiyin
Jan. 2 (Bloomberg) -- Singapore’s fourth-quarter private home prices declined 5.7 percent, the steepest drop in a decade, as the global financial crisis and an economic recession deterred buyers.
The price index of private residential property fell to 163.4 points in the three months ended Dec. 31, from 173.30 in the previous quarter, the Urban Redevelopment Authority said in a statement on its Web site today. That’s the largest drop since the three months ended Dec. 31, 1998, according to data tracked by Bloomberg.
Home prices have retreated for two straight quarters, ending a four-year rally. The island-state said today its economy may shrink by as much as 2 percent this year, the first contraction since 2001, amid a worsening global recession and as writedowns and credit losses in the financial crisis topped $1 trillion.
“With all the bad news coming out on Wall Street, those who want to sell would need to do so at a fairly distressed price and buyers would only be willing to purchase at a fairly attractive price,” said Ong Choon Fah, Singapore-based regional head of research at DTZ, a property consulting firm. “That’s why the number of transactions dropped dramatically during the fourth quarter and we certainly expect the first quarter to remain slow.”
Prices for apartments in the so-called core central area dropped 6.3 percent in the three months ended Dec. 31 and slipped 5.5 percent elsewhere in central Singapore, according to the Urban Redevelopment Authority. They fell 4.7 percent across other parts of the island, today’s report showed.
CapitaLand, City Developments
The data is based on transactions in the first 10 weeks of the quarter, the government agency said. It will provide an update in four weeks.
CapitaLand Ltd., Southeast Asia’s largest developer, rose 4.8 percent to S$3.26 at 2:35 p.m. in Singapore trading. The shares dropped 50 percent last year, its largest loss on record. Keppel Land Ltd., the third-biggest, climbed 4.7 percent to S$1.78.
City Developments Ltd., Singapore’s second-largest real estate company, added 3.8 percent to S$6.61. The developer said on Nov. 13 it would delay selling homes at new residential projects “for the time being” amid the weakening property market and global slowdown.
“Developers in general have not made very significant changes to their prices and there’s the view that some of them are waiting to ride out the slowdown,” DTZ’s Ong said.
The government agency said on Dec. 19 about 10,450 unfinished homes were sold under a deferred mortgage plan that allowed buyers to postpone taking out loans equivalent to as much as 90 percent of the property values until they were completed.
Some of those homes may be at risk of default or so-called distressed sales if prices decline further, analysts at brokerages including CLSA Ltd. have said.
To contact the reporter on this story: Chen Shiyin in Singapore at [email protected].
Last Updated: January 2, 2009
