Press Releases

For media enquiries, please contact

Singapore home prices slide for second straight quarter
Singapore Property Market News and Analysis

Latest Property Real Estate News - Published on 25/04/2014

Singapore home prices slide for second straight quarter – Brace for another year of decline in both public and private home prices as cooling measures and stricter home loan rules bite deeper

HDB resale prices fall for the third consecutive quarter

Resale prices for HDB flats continued their decline in the first quarter of 2014, a trend which is unlikely to reverse even by the end of this year — this is the result of a convergence of measures imposed last year to cool the market and a continued supply of new flats. HDB today indicated that the resale price index in 1Q14 was 198.5, which represented a 1.6 percent contraction from the previous quarter.

This continued decline comes after a 6.6 percent price growth in 2012 and a double-digit growth in 2011. It also marked three consecutive quarters of price decreases from 2013 (the index dipped 0.9 percent in 3Q13 and 1.5 percent in 4Q13). Mr Mohamed Ismail, CEO of PropNex Realty said, “The potent combination of the measures has been effective at slowing down the price growth of HDB resale prices. I am not surprised that the downward trend to continue with prices dropping by between 6 to 8 percent in 2014 and beyond,” commented Mr Ismail.

“The recent HDB’s change to the valuation procedure will also create a cautious approach from buyers, and I foresee them being more careful when giving an offer for a particular flat. This will further increase a downward pressure on resale prices in the coming quarters.”

Over the next three years, 80,000 new BTO flats will be completed and keys handed over to buyers. HDB will also launch a total of 24,300 BTO flats in 2014 – this is just slightly lower than last year's supply of 25,100 units. And according to Minister Khaw, 18,000 households in the next 3 years will be moving to a BTO flat, thus they are required to sell off their existing flat within the 6 months. With the forthcoming supply of HDB resale units in the market, it is expected to further create a downward pressure for HDB resale prices. In the next 2 years, we are expecting HDB resale prices may well drop by 12 to 15 percent," predicted Mr Ismail.

Mr Ismail does not expect a turnaround this year, given a looming flood of new homes and the continued impact of property measures such as lower mortgage servicing ratio, shorter loan tenure and a minimum three-year waiting period for PRs wanting to buy HDB resale flats.

“Home buyers are now more restrained as they have to think twice if their MSR is over 30% or TDSR is near 60%. In summary, home-buying is more complicated, and have discouraged many. Loan curbs and softer prices will ultimately mean that HDB upgraders have less to spend on their next property as their purchasing power is being eroded,” concluded Mr Ismail.

Private property resale prices continue to head south

After a tumultuous year that saw the most severe set of property cooling measures and lending curbs implemented by the government. According to data released by URA today, Singapore’s private home prices slid for a second consecutive quarter in 1Q14 as market exuberance for private homes was very much tempered by the existing property cooling measures and the Total Debt Servicing Ratio (TDSR) framework.

The index fell 1.3 percent to 211.6 points in 1Q14, accelerating from a 0.9 percent fall in 4Q13 — this is the second consecutive quarter of decline, and also the largest drop since 2Q09. According to PropNex, the two successive quarters of decline in private home prices is in line with the slower transaction activities in both primary and secondary sales markets and is evident that the multiple rounds of the government’s cooling measures and particularly the TDSR have been effective in steering the private residential market towards prudence and stability.

In the resale market, homebuyers’ remained averse to properties with a large quantum. With their persistent price sensitivity and the reduction in their purchase budget under the strict TDSR framework, prices of mid- to high-end homes in the Rest of Central Region (RCR) and Core Central Region (CCR) showed greater declines.

In the primary market, the concern of affordability remained crucial to homebuyers. As such, developers dangled various sweeteners to attract buyers such as early-bird discounts, price adjustments and/or direct star buy opportunities. With developers pricing their new projects sensitively, price declines were registered.

As a result, mass-market home prices in the OCR declined for the second straight quarter by dipping 0.1 percent; RCR prices fell 3.3 percent—reversing a 0.4 percent gain in 4Q13. Finally, high-end properties in the CCR fell for the fourth consecutive quarter as it dropped 1.1 percent.

"By now, we are convinced that the private residential market has turned the corner and is entering into a consolidation phase with reduced transactional activity and prices under pressure," continued Mr Mohd Ismail, CEO of PropNex Realty, "the various government measures have effectively curtailed demand from most groups of home buyers."

“The demand for private homes in the mass market segment may have been affected by the declining HDB resale prices, which possibly deterred sellers who are looking to sell their HDB flats and upgrade. The smaller gain achieved from the sale of their HDB flat will limit their budget for their new private property and may cause many to put their plans on hold because the potential profit is insufficient to allow them to upgrade.”

The importance of ‘pricing it right’

Recognising the slowing market activity and the importance of ‘pricing it right’, Mr Ismail stresses that developers need to review their marketing and pricing strategies to entice buyers as they have become highly sensitive to the price quantum. Nonetheless, selected launches (The Hillford, DUO Residences, Rivertrees Residences and Riverbank@Fernvale) have sold well, indicating that with the right marketing and pricing formula, underlying demand can translate into sales.

Notwithstanding the expected improvement in buying volume which is in line with more upcoming new launches in the pipeline, there will be little respite for the private residential property market at least in the short term. This is due to the continued enforcement of the cooling measures as well as longstanding concerns of potential interest rate increases and a large oncoming supply of homes. As such, Mr Ismail predicts that a buyer’s market is expected to persist until the end of the year.

"We expect prices to remain relatively stable with a bit of downward pressure in the first half of 2014. Developers will adjust their launch prices to match the current inertia in the market, but will not drop prices too much due to the high price in which they have secured the land. Similarly, I believe secondary resale prices will take cue from the primary market in a bid to attract buyers.”

Prices in the CCR are expected to fall by another 2 to 3 percent in the next 3 quarters this year, with an estimated 4 to 5 percent decline in 4Q14 y-o-y due to the higher absolute quantum and larger unit sizes compared to homes in the other regions.

RCR price decline could slow in the second half this year, with an overall decline of about 5 percent by 4Q14 y-o-y. However, this segment could be more resilient given its dual attributes of close proximity to the city centre and lower prices compared to the high-end new private homes in CCR.

For OCR, we expect prices of mass market homes to fall by another 2 to 3 percent this year, with an estimated 3 percent decline in 4Q14 y-o-y. This is due largely to the moderation in HDB resale flat prices which would inevitably have an adverse impact on upgraders’ purchasing power.

As long as borrowing costs stay low, the government is unlikely to reverse the earlier anti-speculation measures. With TDSR being a long-term instrument—and together with the ABSD, will continue dampen any speculative activity. Under such an environment, we expect price weakness to persist. Assuming that current policies remain in force to year end, overall private home prices is envisaged to decline by about 4 to 5 percent in 2014 y-o-y.

“It may be timely to adjust some of the cooling measures—especially the ABSD, in order to ensure a sustainable growth of private property prices in the long term,” concludes Mr Mohd Ismail.


For media enquiries, please contact:

Carolyn Goh
Corporate Communications and Marketing Manager
P & N Holdings Pte Ltd (holding company of PropNex Realty)
480 Lorong 6 Toa Payoh #10-01 HDB Hub East Wing Singapore 310480
DID : (65) 6829 6968 / 98287834 | Main : (65) 6820 8000 | Fax : (65) 6829 6600

Our Services and Tools

PropNex Services and Tools View More


PropNex Milestones View More

Management Team

PropNex Management Team View More