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Cooling measures taking effect, say analysts

Tuesday 29 March 2011

SINGAPORE - Figures released yesterday appear to show that the Government's property cooling measures, the last round announced in January, have started to take effect.

The NUS Private Residential Price Index, which tracks month-on-month price movements of private, non-landed residential properties, fell 0.4 per cent compared with January, with prices in non-central areas falling 1.5 per cent. Prices of central area properties, however, continued to gain, rising by 1 per cent.

Analysts said the fall, although small, does show some impact of the cooling measures.

Mr Liang Thow Ming, head of residential services at Credo Real Estate, said that the overall decline was too marginal to confirm a trend. "But in a way, it does suggest that the market has taken a breather, as compared to how it was behaving last year and in January this year," he said.

The cooling measures announced in January, included higher stamp duties for sellers and a reduction in the amount of credit available to those who already have outstanding mortgages.

Meanwhile, real estate services firm DTZ pointed out that prices of prime and suburban resale homes continued to rise in the first quarter, but at a more moderate pace, while luxury resale home prices remained unchanged.

According to DTZ, the average resale price of leasehold condominiums in suburban areas inched upwards by 0.8 per cent to S$665 per sq ft, while average resale prices of freehold non-landed condominiums in price districts grew 0.4 per cent on quarter to S$1,525 per sq ft.

Luxury condominiums in prime areas remained unchanged at an average of S$2,630 per square foot for the second consecutive quarter, DTZ said.

Ms Chua Chor Hoon, head of DTZ South East Asia Research, said: "We expect the pace of increase in prices to continue to slow down and plateau. There is more uncertainty this year, not just from the possibility of more cooling measures, but also from the recent regional events in the Middle East and Japan, the full impact of which are still not known." Chris Howells

Source: Today