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RESIDENTIAL property prices continued to fall in the third quarter, with the year-to-date drop in the Urban Redevelopment Authority's private home price index standing at 3.2 per cent - similar to the 3 per cent fall in the same year-ago period.
In the year to date, the Housing & Development Board's resale price index has retreated 1.8 per cent - down from a 4.6 per cent drop a year ago.
Both URA's and HDB's benchmark price indices for Q3, released on Friday, were identical to the flash estimates earlier this month. The HDB index posted the smallest quarter-on-quarter (q-o-q) fall of 0.3 per cent in nine consecutive quarterly declines; on the other hand, the 1.3 per cent q-o-q drop in URA's index was the steepest in eight straight quarters of declines.
Most observers say that HDB resales prices are stabilising. However, OrangeTee senior manager for research and consultancy Wong Xian Yang said prices remain "on shaky ground" as the familiar headwinds facing the resale market continue to prevail.
Moreover, as ERA Realty Network key executive officer Eugene Lim noted, the recent increase in the income ceiling for Build to Order (BTO) flat buyers has drawn away some demand from the resale HDB market.
For the private housing market, price stabilisation may be further away. JLL national director Ong Teck Hui said: "There is a possibility that quarterly price declines could widen, depending on how the economic slowdown affects buyers' sentiments and demand."
Deeper price cuts may not necessarily be a bad thing, compared with a slow-motion price fall, said R'ST Research director Ong Kah Seng.
"Deep price cuts within one or two quarters, as seen in Q1 and Q2 2009, when URA's private home price index fell 14.1 per cent and 4.7 per cent q-o-q - created the opportunity for buying to quickly set in, and prices rebounded swiftly in H2 2009."
On a more positive note, URA data showed that the number of unsold, uncompleted private housing units (excluding executive condos or ECs) in the pipeline fell to 22,456 at end-Q3 2015 from 24,435 at end-Q2 2015 and 28,120 at end-Q3 2014.
The pipeline supply of private homes too has contracted - to 58,348 at end-Q3 2015 from 61,237 at end-Q2 2015 and 74,496 at end-Q3 2014.
JLL's Mr Ong said: "Development activity has slowed down, with a smaller Government Land Sales quantum and a quiet enbloc sales market. This results in fewer new projects in the pipeline, which does not exacerbate the unsold stock."
Cushman & Wakefield director Christine Li expects the price decline to persist, at up to 2 per cent per quarter - barring external shocks.
"In light of the recent buoyant take-up for some projects such as High Park Residences, we do not think the cooling measures will be reviewed, as liquidity is still high . . ."
URA's price index for non-landed homes fell 1.5 per cent q-o-q, almost double the 0.8 per cent in Q2.
The price index for landed homes, on the other hand, fell at a slower pace of 0.4 per cent, against one per cent in Q2.
Lee Nai Jia, DTZ regional head of research (South-east Asia), said: "Demand for landed homes has increased as buyers find current prices attractive enough. Based on caveats lodged, 329 landed homes were sold in Q3 2015, the most since Q3 2013." Buyers are mostly owner-occupiers; moreover, the limited stock of landed homes makes them an appealing asset, he added.
Across primary and secondary markets, 4,159 private homes (excluding ECs) changed hands in Q3, up slightly from Q2's 4,104.
URA's overall rental index for private homes eased 0.6 per cent in Q3, about half the 1.1 per cent fall in Q2.
The vacancy rate for private homes stood at 7.8 per cent at end-Q3, down slightly from 7.9 per cent at end-Q2.
EC vacancies fell more dramatically from 14.1 per cent at end-Q2 to 10.5 per cent at end-Q3. Mr Ong of R'ST said: "EC vacancies tend to fluctuate more wildly . . . HDB upgraders have been requiring more time to dispose of their existing flats before moving in to their newly completed ECs as the HDB resale market was in the doldrums last year - although lately it is showing signs of stabilising."
This year, 3,437 ECs are slated to receive their Temporary Occupation Permit (TOP), up from 3,357 last year.
The number is forecast to rise to 4,798 next year, based on data collated by URA from developers.
Excluding ECs, 18,977 private homes are estimated to receive TOP in 2015, down from 19,941 last year. The figure for next year is 22,351.
In the HDB resale market, the number of transactions fell 7.4 per cent q-o-q to 4,893 in Q3, though year on year, the tally was up 8.4 per cent.
ERA's Mr Lim said: "The decrease in resale transactions could be due to the upcoming November launch of 12,000 new flats for sale by HDB.
"Given that these flats include more than 2,000 in the central Bidadari area, it is inevitable that some buyers would want to try applying for a flat this time around."
Still, ERA expects possibly 18,000 to 19,000 transactions for the full year, up from 17,318 last year.
PropNex Realty CEO Ismail Gafoor expects 2015's volume to exceed 19,000 units. "We expect the overall price drop this year to be up to 3 per cent."
The number of subletting approvals fell 4.7 per cent q-o-q to 10,018 in Q3; y-o-y, however, the figure was up 12.3 per cent. Mr Lim said: "However, instead of increased demand, it is more likely that existing tenants are taking advantage of lower rents by signing shorter leases and moving around."