PRICES of private homes fell off a cliff in the first quarter, continuing a dramatic slide that has now wiped out the gains owners have made since 2007.
Values dived 14.1 per cent in the first three months this year - the biggest fall on record - and followed a 6.1 per cent slide in the last quarter of last year.
Figures from the Urban Redevelopment Authority (URA) yesterday also point to pain in the residential rent market and in the office sector.
But the plight of the private home sector caught most attention. The first-quarter fall was worse than an initial URA estimate of 13.8 per cent, indicating the slide accelerated towards the end of the quarter.
The souring of the market has been fast and furious. Prices had been rising for four years and were still going north until as late as September of last year but then the rot set in.
Price declines have been registered in three consecutive quarters with the fall in the first three months of this year the worst since the URA began keeping data in 1975. Private homes on the city fringes suffered the most, with prices down 17 per cent, compared with 16.2 per cent in the city centre and 7.3 per cent for suburban residences.
The hefty gains over the past two years have been erased, so owners who bought after the first quarter of 2007 could see their home's valuation fall below the purchase price, said Colliers International's director for research and advisory, Ms Tay Huey Ying.
Rents for private homes also kept falling and at a faster rate. They plunged 8.5 per cent in the first quarter compared with a 5.3 per cent decline in the last three months of 2008. Rents of non-landed prime homes fell the most, at 10.3 per cent.
HDB resale flats showed more resilience with prices inching lower by just 0.8 per cent in the first quarter - the first fall since the third quarter of 2006.
But there was a sliver of good news. Sales of new homes in the first quarter were a robust 2,596 units, driven by pent-up demand, price cuts and innovative product packaging, experts said.
The mass market sector was most active with upgraders picking up many units to help lessen the rate of price fall in suburban areas, said Knight Frank consultancy and research director Nicholas Mak. Developer sales in suburban areas reached 1,637 units in the first quarter, almost as many as were sold last year, he said.
But the prime market accounted for only a meagre 9.5 per cent of all developer sales. And sales in the resale and sub-sale markets remained weak.
'Property really depends on the economy, and the economy around the world and in Singapore still looks pretty weak.' National Development Minister Mah Bow Tan told Bloomberg in Vietnam yesterday.
Mr Mak expects private home prices and rents to contract sharply in the first half of the year but the rate of decline will decelerate.
Singapore's office market also took a beating in the first quarter. Rents slid 10.7 per cent, the biggest fall since the first quarter of 1992, while prices fell 12 per cent. Take-up contracted for the second consecutive quarter and for the first time since late 2006, the islandwide vacancy rate hit 10 per cent.Source: Straits Times, 25 April 2009