The third quarter saw the Singapore property market take a hit with the continuing economic gloom. The effect was seen in the mall and office vacancies and the reduced prices of private homes and lower rents.
While the vacancies did not surge or prices experience a large drop, the not so good numbers highlighted the trends that have been going on for months.
According to Nicholas Mak, SLP International executive director, the worries due to a weaker economy, job loss news, and impending recession fears seem to be affecting the property market.
While the fall in prices and rents for offices and malls was slower in the third quarter, the vacancy rates were the highest recorded in recent years.
Based on data by Urban Redevelopment Authority, the private residential sector was the hardest hit with a price slid of 1.5% from the 2nd quarter and 1.2% fall in rent. The fall was more than that of 1st to 2nd quarter where prices reduced by 0.4% and rent fell by 0.6%.
In the third quarter, the prices of private homes fell for the 12th consecutive quarter by 10.8% since the 2013 3rd quarter peak.
“If the negative sentiment continues, it could lead to a price decrease of 3-4% for the whole of 2016. So far, overall prices of private homes have reduced by 2.6%,” said Eugene Lim, ERA Realty executive officer.
The prices of landed property had the highest decline at 2.7% from what was recorded in the second quarter while prices of non-landed homes reduced by 1.2%.
Non-landed apartments in the core central region recorded the sharpest fall in prices at 1.9% after a marginal rise in the 1st and 2nd quarters. Both the suburbs and the city fringe recorded a price fall of 1%.
According to analysts, the price decline could have been due to the change in the computation of the URA price index.
Market watchers observed that in the 3rd quarter, the resale market performed better than the new sale section due to fewer new launches by developers.
New home sales were 1,981, a reduction of 12% from the 2nd quarter while resale transactions were 2,477 units in the 3rd quarter, an increase of 15.7%.
Private home rents fell despite the vacancy rate improving by 0.2 points to 8.7% from 2nd to 3rd quarter.
Anthea Yeo, senior associate director PropNex Realty said that the market is now tenant’s with a rental deal taking 3 months to close while previously it took about a month.
The public housing resale sector did not experience a price change in the 3rd quarter, which was a second consecutive quarter without price changes.
Analysts have observed that HBD resale segment is showing signs of stabilizing. The Housing Board said that the public housing resale transactions reduced to 5,514 in the 3rd quarter from 5,838 recorded in the 2nd quarter, a reduction of 5.5%.
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