Singapore home prices dropped for an eighth quarter, matching the longest losing streak in 13 years, as tighter mortgage curbs cooled demand in Asia’s second-most expensive housing market.
An index tracking private residential prices fell 1.3 percent in the three months ended Sept. 30 from the previous quarter, according to preliminary data from the Urban Redevelopment Authority on Thursday. The slump was the most since June 2009, in the aftermath of the global financial crisis.
The government began introducing residential property curbs in 2009 as low interest rates and demand from foreign buyers raised concerns that the market was overheating. They have included a cap on debt repayment costs at 60 percent of a borrower’s monthly income, higher stamp duties on home purchases and an increase in real estate taxes.
Prices fell about 4 percent last year, the first annual decline since 2008, as the government’s campaign to rein in property values curbed demand.
“The key reason for the sharp drop is the cooling measures,” saidNicholas Mak, an executive director at SLP International Property Consultants in Singapore. “The global economic uncertainty and impending slowdown in the Chinese economy may also have slowed demand as Chinese buyers were the more active buyers in Singapore.”
Prices may decline as much as 4.5 percent this year, according to Mak. As Singapore may suffer a technical recession, it might be the right time for the government to take a relook at the property measures, he said.
Apartment prices fell 1.3 percent in prime districts in the third quarter, the data showed. Those in the suburbs dropped 1.6 percent. Prices in areas near prime districts slipped 1.5 percent.
The deterioration in economic sentiment, worsening supply‐demand imbalance and rising vacancy rates, risk precipitating a downward spiraling of property prices, Augustine Tan, president of the Real Estate Developers’ Association of Singapore said last month. The property cooling measures, in the current tone and intensity, could increase the risk to the real estate market and economy, he said.