http://www.straitstimes.com/archive/...tinue-20140628

Dip in private home market 'to continue'

Experts predict Q1 slowdown carried on into Q2 ahead of half-year data

Published on Jun 28, 2014 1:13 AM

By Melissa Tan


THE half-time scorecard for private property sales will be out next week, with most in the industry bracing for a downbeat set of numbers that few expect will get any better as the year progresses.

The first-quarter slowdown is likely to have lingered on into the second quarter as tough home loan curbs continue to deter buyers, consultants said yesterday.

They predicted that overall private home prices could have slid 1 per cent to 2 per cent in the second quarter from the preceding three months, but sales could have been slightly higher.

Dr Chua Yang Liang, Jones Lang LaSalle's head of research for Singapore and South-east Asia, told The Straits Times that the second-quarter overall price drop would probably be around the same as the 1.3 per cent decline in the first quarter.

This could place the decline within a range of 1 per cent to 1.5 per cent from the preceding quarter, he said. "Prices are very competitive right now, and will likely remain like that going forward."

Knight Frank research head Alice Tan also thinks the flash estimates on Tuesday will show that private home prices fell further in the second quarter and added that this weakness is likely to stay.

"The total debt servicing ratio (TDSR) and property cooling measures continue to bite market sentiment, as challenges in private property financing persist. As such, the private homes market could remain fairly subdued in the second half this year," she said.

TDSR caps a borrower's total monthly debt repayments at 60 per cent of his gross monthly income. It was imposed in June last year.

Ms Tan forecast the overall second-quarter price drop to be between 1 per cent and 2 per cent from the preceding three months.

If the market does continue to slow at this pace, the widely expected fall in private home prices this year could be milder than initially feared.

Analysts had earlier forecast a 5 per cent to 8 per cent overall price decline over the course of this year.

However, Dr Chua reckoned yesterday that the price drop will likely come in at the lower end of expectations, adding that the market's performance in the second half of this year would depend on how well upcoming new launches are received. "If projects are priced well, there will be buyers out there," he said.

He said that about 2,200 to 2,300 new private homes are likely to have been sold in April through June, in large part due to the relative bumper crop of 1,470 units moved in May.

There were 1,791 new homes sold in January through March, according to Urban Redevelopment Authority figures.

Ms Tan noted that since there were no major project launches this month, the total number of new homes sold in the first six months of the year would likely be less than 5,000 units.

Upcoming launches include the mixed development City Gate in Beach Road, The Crest in Prince Charles Crescent, Highline Residences in Tiong Bahru and Marina One in Marina Bay.

City Gate, which opens for preview today, sits on the site of the former commercial development Keypoint and is being jointly developed by World Class Land and Fragrance Group.

Units there range from 431 sq ft one-bedders to 1,819 sq ft penthouses.

Prices are expected to be in the range of $1,900 to $2,200 per sq ft (psf).

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