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Home prices in Singapore see first drop in 4 yrs


October 3, 2008

Home prices in Singapore see first drop in 4 yrs
Singapore private home prices fell 1.8 percent between July and September, snapping four straight years of growth and sending property stocks plunging to near three-year lows, reported Reuters.

The Urban Redevelopment Authority (URA) said on Thursday early estimates showed the price index for private residential properties dropped to 174.3 points for the three months ended September from 177.5 in the previous three-month period.

This is the first decline in the index since the first quarter of 2004, as concerns over global financial turmoil caused home sales to slump.

"Bad news in the global markets deflated investor sentiments. We expect home prices to decline for at least the next 12 months," said Nicholas Mak, head of research for property consultancy Knight Frank.

Shares of developers such as CapitaLand , City Developments and Keppel Land extended earlier losses after the noon trading break, underperforming the Straits Times index which lost 1.1 percent.

CapitaLand fell as much as 4.6 percent, CityDev lost 7.8 percent, while KepLand dropped nearly 4.6 percent, taking the city-state's top three homebuilders down to near three year intraday lows hit on Tuesday.

"Developers that have unlaunched projects may want to do so soon while it is still profitable for them. Otherwise it could be a long wait for the market to recover," Mak said.

Private home sales in Singapore plummeted 81 percent in August from a year ago, to the lowest level since March as a combination of global financial turmoil and the traditionally "unlucky" Hungry Ghost month spooked buyers.

Poor demand and a looming housing glut are threatening to plunge the property market into a prolonged downturn, which could deal a blow to Singapore's top developers.

The advance estimates are compiled from transaction prices lodged during the first 10 weeks of the quarter as well as data from new apartments that have been booked. The URA will release the official price index in four weeks.

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