SINGAPORE - Property cooling measures and a large supply of new flats have led to public-housing prices rising at a slower pace in the second quarter, said housing experts yesterday.
Housing Board (HDB) resale prices rose just 0.5 per cent in the second quarter of the year, based on estimates released yesterday. This is lower than the 1.3 per cent rise in the first quarter, as well as the 1.3 per cent rise in the second quarter of last year.
HDB said this was the lowest quarter-on-quarter growth since the first quarter of 2009.
Ms Christine Li, head of research and consultancy at real-estate firm OrangeTee, said that January's property cooling measures "have helped to stabilise HDB resale prices", as well as cash-over-valuation (COV) values - the sum paid over and above the valuation of a flat.
One cooling measure stated that home buyers taking a HDB loan were limited to one where the monthly repayment does not exceed 35 per cent of their gross monthly income, down from 40 per cent.
Data released by the Singapore Real Estate Exchange early last month showed that the overall median COV fell to $26,000 in May, compared to $35,000 at the start of the year.
The "abundant supply" of HDB Build-to-Order (BTO) flats that the Government has been rolling out could have also "diverted some demand away from the resale market", said Ms Lee Lay Keng, DTZ's head of Singapore research.
Mr Mohamed Ismail, chief executive of PropNex Realty, said the release of new BTO flats means that the resale market "is effectively serving only upgraders and permanent residents now".
He expected the gradual, rising trend in resale prices to continue, although at an even-slower pace with the January measures and the Government's move to "unpeg new-flat prices from those of resale units".
Ms Li said COVs will stabilise or fall further for the rest of the year, with an expected 10 per cent drop from current values.
Meanwhile, estimates from the Urban Redevelopment Authority showed that private-home prices rose moderately by 0.8 per cent in the second quarter. Unlike HDB resale prices, this was higher than the 0.6 per cent rise in the first quarter and the 0.4 per cent in the second quarter of last year.
Knight Frank said the continued rise in prices "is a reflection of robust underlying demand".
Ms Li said there was still demand despite the cooling measures as some buyers had been using "proxies" - buying private homes under the names of their children or relatives.
But last Friday's move by the Monetary Authority of Singapore to limit this is expected to lower investor demand going forward, she said.
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