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Private home price index gain slows to 0.5% q-o-q in Q3: URA flash estimate
THE Urban Redevelopment Authority's (URA) widely-watched private residential property price index rose 0.5 per cent in the third quarter of 2018 over the preceding quarter, based on a flash estimate released by the authority on Monday morning.
This is a much smaller pace of increase compared with the quarter-on-quarter (q-o-q) increases in the index of 3.4 per cent in second quarter 2018 and 3.9 per cent in the first three months of this year.
The marked slowdown in the index's pace of rise in Q3 2018 follows the introduction of the latest property cooling measures which took effect on July 6 this year.
The index is now up 8.8 per cent from a year ago going by the flash data.
In the third quarter, prices of landed homes rose 1.7 per cent over the preceding quarter, following a 4.1 per cent hike in the second quarter.
Prices of non-landed private homes inched up 0.2 per cent in the third quarter, after appreciating 3.2 per cent in the previous quarter.
Giving a breakdown of non-landed private home prices by region in the third quarter, the URA said that prices rose 1.2 per cent in the prime areas or Core Central Region (CCR); this compares with the 0.9 per cent increase in the previous quarter.
In the city fringe or Rest of Central Region (RCR), prices fell 0.8 per cent, contrasting with the 5.6 per cent jump in the previous quarter.
Prices in the suburbs or Outside Central Region (OCR) inched up 0.1 per cent, after climbing 3 per cent in the previous quarter.
The URA said that the flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up till mid-September.
The statistics will be updated on Oct 26, 2018 when the URA releases its full set of real estate statistics for Q3 2018.
"Past data have shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution," it added.
Desmond Sim, head of research, Singapore and South-east Asia, at CBRE, said that the URA's Q3 2018 flash estimate for its overall private home price index is a "clear indicator that the cooling measures which took effect on July 6 have managed to curtail the exuberance in the market".
He is expecting an 8-10 per cent increase for the index in 2018, on the back of upcoming launches acquired at higher land costs.
Eugene Lim, key executive officer at ERA Realty Network, said: "Going forward, it will probably take some time before the market finds its footing. Meanwhile, developers are still going ahead with their launches as planned. We have not seen significant discounts being offered as most of the developers have strong holding power. That said, several risks are present: Trade tensions between the US and China; and increasing interest rates."
"Nonetheless, we are still forecasting an overall 8-8.5 per cent price increase in 2018, barring any unforeseen circumstances."