SINGAPORE - Demand for cheaper mass- market homes in the wake of tougher loan rules pushed up overall property prices marginally in the third quarter.
Prices of non-landed homes rose 0.4 per cent in the three months to last month, down from a 1 per cent increase in the previous quarter, according to Urban Redevelopment Authority (URA) flash estimates on Tuesday.
Analysts said the introduction of the total debt servicing ratio in June has dampened prices as buyers are finding it harder to finance new homes.
The rules cap a borrower's total monthly debt payments at no more than 60 per cent of his gross monthly income.
Prices of non-landed homes in both the central and city-fringe areas fell in the third quarter, with only suburban apartments and condominiums registering rises.
In the central areas, prices declined 0.5 per cent, following a 0.2 per cent slip in the second quarter.
Prices of city-fringe homes fell by 1.1 per cent - the first decrease since the first quarter of last year, said the URA. Prices had risen 0.2 per cent in the second quarter.
"With affordability being a main concern in the current market, demand for homes in the higher-tiered segments in the city fringes and city centre had become comparatively more subdued, and this resulted in price declines," said Colliers director of research and advisory Chia Siew Chuin.
In contrast, prices of suburban non-landed homes gained 2.1 per cent in the third quarter, although the rise was also lower than the 3.8 per cent recorded in the second quarter.
Buyers have become more price sensitive and are looking at units costing between $800,000 and $1.2 million, said ERA Realty key executive officer Eugene Lim, adding that "these are mostly found in the suburbs".
The flash estimates are based on data from the first 10 weeks of the July to September period and will be updated in four weeks.
CBRE Research associate director Desmond Sim said that when sales from launches in the last two weeks are included - namely, those at Thomson Three and Sky Vue - in the revised price index, overall prices might rise to match last quarter's figures.
Experts added that developers are likely to continue to adjust selling prices to move sales.
"With more launches expected in the last quarter this year, we expect a healthy demand as long as developers price their pro- jects right," said PropNex Realty chief executive Mohamed Ismail.
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