Singapore home prices dropped for an 11th quarter, posting the longest losing streak on record, as the government holds steadfast on cooling measures it has rolled out since 2009, for fear of reigniting the market.
An index tracking private residential prices fell 0.4 percent in the three months ended June 30 from the previous quarter, capping the longest series of quarterly losses since 1975, when prices were first published, according to preliminary data from the Urban Redevelopment Authority on Friday.
The government has signaled it is reluctant to lift property-tightening measures it brought in over the last seven years as it wants to avoid overheating in the market again. It is too early to relax the curbs, as doing so could result in a market rebound, National Development Minister Lawrence Wong said in a written reply to parliament on February 29. Finance Minister Heng Swee Keat reiterated that view in his budget speech on March 24, saying it was “premature” to relax the restraints.
“The market isn’t collapsing; we are seeing a slow, gradual decline so the government won’t feel the need to remove the cooling measures,” said Nicholas Mak, an executive director at SLP International Property Consultants in Singapore. “Prices will continue a gradual decline and I don’t see the curbs being removed this year.”
The residential curbs have included a cap on debt-repayment costs at 60 percent of a borrower’s monthly income and higher stamp duties on home purchases, after low interest rates and demand from foreign buyers raised concerns prices had risen too far too fast. Home values have dropped 9.4 percent from the peak in 2013 and sales have declined to about half the level that year.
Developers remain hopeful that some measures will be eased this year. Kwek Leng Beng, the billionaire executive chairman of City Developments Ltd., which built luxury condominiums, such as the St. Regis Residences near the Orchard Road shopping belt, said in February he is expecting the government to remove the stamp duties on home purchases.
Apartment prices rose 0.2 percent in prime districts in the three months ended June 30, Friday’s data showed. Those in the suburbs slid 0.7 percent, while areas near prime districts gained 0.3 percent from the previous quarter.
Still, Singapore remains a high-end housing market in Asia. The city was ranked the most expensive to buy a luxury home after Hong Kong in the region, according to a 2016 Knight Frank wealth report.
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