Jan 30, 2012 | Comments 3
Although the private property’s price index in Singapore recorded a new high of 205.7, the 0.2 per cent growth is the lowest percentage increase per quarter since the financial crisis of 2008, PropNet reported on Monday.
The marginal increase of 0.2 per cent Q-on-Q, compared to the 1.3 per cent increase in the 3Q11 reflects a cautious market sentiment due to the uncertain global economic outlook and the Additional Buyer’s Stamp Duty (ABSD) implemented on December 8.
PropNet projects that the private property sector will likely have a price decrease in the next quarter. For 2011, prices of non-landed properties increased by 4.0 per cent in the Core Central Region (CCR), 4.5 per cent in the RCR and 7.7 per cent in the Outside Central Region (OCR), compared with 14.2 per cent, 17.6 per cent and 15 per cent, respectively, in 2010. The growth in the OCR was due to mass market condominium launches in these areas. It is projected that the mass market demand will still remain strong as most HDB upgraders will now purchase or invest with mid to long term perspectives.
The latest round of cooling measure which include, the ABSD, a lower Loan-To-Value ratio cap of 60 per cent, and an extended minimum holding period for imposition of Sellers’ Stamp Duty (SSD) to four years, with the SSD increased to up to 16 per cent, targeted at speculators and encouraged more home buyers to adopt a mid-to-long term view for their property purchase/investment. The impact is evident in the lowest transaction volume in the Core Central Region (CCR) in 2011.
“With increased supply of private properties anticipated in 2012 and the numerous cooling measures, it is expected that prices to further soften,” said Mr Mohamed Ismail, CEO of PropNex Realty. He said this will result in an overall price correction of approximately 5 per cent dip in the private property price index for 2012.
Mass market condominiums in the OCR should decline by 3 to 5 per cent, as new developments in this area are launched at prices that are sensitive to the cooler market sentiment, PropNet said.