UPDATE 1-Singapore home price rise slows in Q1, sales slump
(Updates with details, analyst quotes)
By Daryl Loo
SINGAPORE, April 25 (Reuters) - Singapore private home prices rose 3.7 percent between January and March, the second straight quarter of slower growth as property sales slumped to the lowest in five years, government figures showed on Friday.
The Urban Redevelopment Authority (URA) said the price index for private homes, an indicator of inflation that is already at 26-year highs, rose to 177.2 for the three months ended March, from 170.8 in the previous three-month period.
The rise is slower than a 4.2 percent first quarter increase estimated by the government on April 1, which was based on prices recorded in the first 10 weeks of the quarter.
"There are definitely signs of a softening property market, especially in the mid-tier regions where buyers are more sensitive to pricing," said Jones Lang LaSalle head of research Chua Yang Liang.
Private home prices in the city-state had jumped 31 percent in 2007 for the largest increase in eight years, but the growth slowed since the final quarter of 2007 as sales volumes slumped.
Moves by the government to cool the Singapore housing market, coupled with fears of a global economic downturn, have kept homebuyers away from showrooms and are expected to hit developers such as CapitaLand (CATL.SI) and City Developments (CTDM.SI).
Sales of homes yet to be built by developers fell to 730 units for the first three months of 2008, nearly half the 1,397 units sold in the previous quarter and setting the lowest quarterly sales volume since the SARS epidemic in 2003.
Property firms responded to the uncertain market by putting up fewer units for sale, launching 1,343 units in the first quarter compared with 1,646 units in the Oct-Dec period.
Sub-sales, or the secondary sales of uncompleted homes and an indicator of property speculation, nearly halved to 346 units from 649 units the previous quarter after the government in October ended a scheme that allowed payments to be delayed. The slowdown in property price inflation was seen across the board from shops to factories, with prices of new offices showing the greatest moderation, recording a 1.1 percent increase compared with an 8 percent rise in the previous quarter.
"Office sales are driven by institutional investors like funds and corporations which have been affected by the credit crisis situation, and this has led to fewer transactions," said Chua.
There were still 67,736 private residential units and 1.49 million square metres of office space in the pipeline to be completed as of end-March.
"Of these, 56,501 private residential units and 1.11 million square metres of office space are expected to be completed between second quarter 2008 and 2011," the URA said.
Separately, the Housing and Development Board said resale prices of public flats, which house over 80 percent of Singaporeans, slowed to a 3.7 percent rise in the first quarter compared with the previous quarter's 5.7 percent increase. (Editing by Neil Chatterjee)
