Housing market in Singapore continue to weaken

According to CNA: Private home prices fell by 6.1 per cent in the fourth quarter of 2008. The drop is 2.4 per cent in the third quarter ended September. Sales of private homes also declined in the fourth quarter. There were only 407 transactions, about 72 per cent lower than in the third quarter.

Strong demand pushed up private home prices by about 31 per cent in 2007. But the picture changed very quickly in just one year. In 2008, overall prices of private residential properties fell by 4.7 per cent, hurt by the global slowdown. Market watchers said they expect to see more downside.

Prices of homes in prime areas continued to slip faster than those in the mid-tier and mass market segments in the fourth quarter of 2008. They fell 6.5 per cent, compared with the 6.2 per cent drop for the mid-tier and the 5.9 per cent decline for the mass market segments.

It is unclear how long and how deep the recession will be, but some market players are already expecting the potential fall in private home prices to be comparable to levels seen during the Asian financial crisis when prices dropped by 42 per cent over two years.

According to the Urban Redevelopment Authority, 706 uncompleted units were launched for sale by developers in the fourth quarter, down from 2,244 units in the previous three months.

Meanwhile, public housing prices remained more resilient. HDB resale flat prices in the fourth quarter rose by 1.4 per cent, albeit lower than the 4.2 per cent increase recorded in the third quarter. But transactions fell by 24 per cent to about 6,190 units, while the median cash-over-valuation amount dropped by S$4,000 to S$15,000 in the fourth quarter. Property analysts expect the downtrend to continue.


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Read Singapore Master Plan before you buy a house in Singapore

So make sure you have read the Master Plan before choosing where to buy a house. By doing so, after a few years, if your area is being developped as promised by the Master Plan, your house will increase its value much faster than other area.

The Master Plan is the statutory land use plan which guides Singapore's development in the medium term over the next 10 to 15 years. It is reviewed every five years and translates the broad long-term strategies of the Concept Plan into detailed plans to guide development. The Master Plan shows the permissible land use and density for every parcel of land in Singapore.

Like the Concept Plan, the Master Plan is a collaborative effort between agencies to ensure that plans meet immediate economic and social needs while maintaining a good quality living environment.

The Master Plan is one of the most important tools used to shape Singapore’s physical development. Many proposals put forth in the Master Plan have been realised by the private and public sectors. Examples are the transformation of Singapore River and the development of new commercial centres at Tampines and Novena.

As for when to buy a house in Singapore. Recently the report says that HDB resale prices could dip soon. Prices of HDB resale flats have continued to rise even as the economic downturn takes its toll on jobs, wages and private home prices. But analysts warn this recent steady rise may not last long.
According to flash estimates of HDB's Resale Price Index released yesterday, prices of flats in the fourth quarter of last year rose 1.5 per cent over the preceding quarter. This figure is considerably lower than the 4.2 per cent increase in the third quarter, and it is the first time that growth has dipped below 3 per cent in six months, said real estate agency PropNex.

But while average prices of HDB resale flats are now at an all-time high, property analysts say that they are likely to dip some time this year. 'Sentiment is pretty soft as many people are taking a wait-and-see approach,' said Mr Eric Cheng, executive director of HSR Property Group. 'If prices dip, they will do so in the second and third quarters of this year.'



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