Monday, April 02, 2012

Private home prices drop, HDB resale prices increase

Residential property prices have declined in Q1 2012, according to flash estimates of the private residential property price index released by the Urban Redevelopment Authority (URA).

This is the first price decline seen since Q2 2009, following the trend of stabilising prices over the past nine consecutive quarters. Notably, the private residential property price index slid to 206.0 points in Q1 2012 from 206.2 points in Q4 2011.

Moreover, prices of non-landed private residential properties declined by 0.9 percent during the quarter in the Core Central Region (CCR) and 0.7 percent in the Rest of Central Region (RCR).

At the same time, prices in the Outside Central Region (OCR) inched up by 1.2 percent compared to just 0.6 percent in the previous quarter, the URA said.

Meanwhile, the Housing and Development Board (HDB) has released its flash estimates for Q1 2012’s Resale Price Index (RPI), which is at 191.6.

The quarter’s RPI rose 0.6 percent from Q4 2011, but is still lower than the 1.7 percent increase seen in the previous quarter.

Conversely, it is also the lowest RPI growth since Q3 2006.

Commenting on the latest figures, Dr Chua Yang Liang, Head of Research, South East Asia at Jones Lang LaSalle, said, “This divergent market is likely to continue into Q2 2012 unless there are further government interventions. To this end, the risk of the latter is elevated given the stronger than expected growth in prices in the OCR coupled with recent strong sales volumes in February.”

He added that “the difficulty for policy makers today is to introduce a simple and fair measure that does not penalise one submarket over another,” adding that it is challenging when prices in the private high-end market are correcting while the mass market is on the rise.

“In my opinion, the state could discourage excessive purchases by raising the eventual holding costs such as a temporary increase in the residential property tax rate for investment purposes,” noted Chua.

View the original article here

Source From Property Guru

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