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PRIVATE home prices in Singapore registered the second-largest drop among its Asian counterparts in the last quarter, coming behind only China, according to Knight Frank's Global House Price Index.
The index, which was released on Friday, found that Singapore non-landed residential prices fell 3.2 per cent year on year. On a quarter-on-quarter basis, prices fell 0.8 per cent.
The continual fall in non-landed private home prices demonstrates persistent weakness of the market with prospective buyers remaining cautious against the backdrop of existing cooling measures and in anticipation of further price correction, said Alice Tan, director and head of consultancy and research at Knight Frank Singapore.
"Looking ahead towards the end of this year, Singapore's private homes market is expected to face downward pressure both in price and rental performance, with the combination of factors including the rising completed supply of private homes, impending hike in interest rates, macroeconomic uncertainties and continual slowdown in Singapore's economy," she added.
She expects overall private non-landed home prices to decline by 3-4 per cent on a yearly basis by Q4 2015.
Meanwhile, China, which supplants Greece as the world's key economic concern, saw prices fall 5.7 per cent year on year; it recorded positive quarterly growth of 0.2 per cent.
Elsewhere in the region, the Hong Kong market continued to defy policymakers' cooling measures, with mainstream prices up 20.7 per cent year on year, making it the market with the highest increase in prices across the index.
Nicholas Holt, head of research for Asia-Pacific, noted that while economic concerns in China will continue to cause jitters throughout Asia-Pacific, the resulting impact is not necessarily straightforward.
"On the one hand, economic growth is a key indicator for future house price performance; while on the other, property in times of economic turbulence has been seen as a safe haven and a postponement of an interest rate hike in the US will continue to provide many markets with a low cost of debt."
In annual terms, the index rose by only 0.1 per cent in the year to June, its weakest rate of growth since the final quarter of 2011. Of the 56 housing markets tracked, 27 per cent recorded an annual decline in prices compared with 44 per cent of housing market in 2011.
*Full research report available on BTInvest (http://www.btinvest.com.sg/property/)