SINGAPORE, July 1 ― Singapore’s second-quarter home prices slid for a third consecutive quarter, the longest losing streak in five years, as tighter mortgage measures cooled demand in Asia’s second-most expensive housing market.

An index tracking private residential prices fell 1.1 per cent to 209.3 points in the three months ended June 30, following a 1.3 per cent decline in the previous three-month period, according to preliminary data released by the Urban Redevelopment Authority today.

In addition to previous measures including new taxes and higher down-payments, Singapore announced rules in June last year governing how financial institutions extend property loans to individuals. These steps were part of a government campaign that started in 2009 to rein in speculation in the Southeast Asian city.

“The price moderation last quarter was lower than expected, which probably means that the measures are here to stay for now,” said Donald Han, managing director of Chesterton Singapore Pte, a real estate consulting company. “It’s a healthy correction though volumes have dropped by half since the loan measures last year.”

Prices this year could decline by between five per cent and eight per cent, Han said.

Falling prices

Apartment prices fell 1.5 per cent in prime districts in the second quarter after sliding 1.1 per cent in the previous three months, the URA data showed. Those in the suburbs dropped 1.1 per cent, compared with a 0.1 per cent decline in the previous quarter, according to the data. Prices in areas near prime districts slipped 0.6 per cent, compared with a 3.3 per cent decrease in the previous quarter, the data showed.

Under the new loan framework, mortgages shouldn’t push a borrower’s total debt-servicing ratio above 60 per cent and those that do will be considered imprudent, the Monetary Authority of Singapore said in June 2013.

Mortgage loan growth at 7.6 per cent in May was the second-slowest pace since June 2007, data compiled by Bloomberg based on MAS figures showed.

A slew of property measures have raised concerns among those in the industry. Singapore could lose its competitive edge as an investment destination unless the government reviews its property cooling measures, the Straits Times newspaper reported, citing Kwek Leng Beng, executive chairman at City Developments Ltd., the country’s second-largest developer.

Home prices added 1.1 per cent in 2013, lower than the 2.8 per cent gain in 2012 and the smallest annual increase since 2008 when prices slid 4.7 per cent.

Singapore’s home sales rose in May to 1,470 units, highest in almost a year, from 749 units in April, as developers marketed new projects amid declining prices, a government report showed last month.

Singapore was the most-expensive city to buy a luxury home in Asia after Hong Kong, property broker Knight Frank LLP said in an annual wealth report. ― Bloomberg