Singapore home prices climb to record as loan curbs imposed

SINGAPORE, July 26 — Singapore home prices climbed to a record in the second quarter as gains in suburban housing values accelerated as the government implemented new measures on property loans.

The island state’s private residential property price index rose 1 per cent to 215.4 points in the three months ended June 30, extending a 0.6 per cent increase in the first quarter, according to revised figures released by the Urban Redevelopment Authority today. The pace of gain in suburban home prices more than doubled from the previous three months.

Record home prices amid low interest rates raised concerns of a housing bubble and prompted the government to widen a four-year campaign in January to curb speculation in Asia’s second-most expensive housing market. Singapore on June 28 unveiled new rules governing how financial institutions grant property loans to individuals, extending efforts to curb excessive price increases.

Apartment prices fell 0.2 per cent in prime districts in the second quarter, compared with a 0.6 per cent gain in the previous three months. Those in the suburbs climbed 3.8 per cent, compared with the 1.4 per cent increase in the previous quarter, according to today’s government data.

Singapore is Asia’s most-expensive housing market after Hong Kong, according to a Knight Frank LLP and Citi Private Bank report released last year that compared 63 locations globally. Hong Kong homes cost an average US$28,300 (RM90,734) per square meter in 2011 compared to Singapore where an apartment would cost US$25,600 per square metre, the report showed.

Slowing sales

Developers sold 4,538 units in the second quarter, 16 per cent lower than the previous quarter, the data showed. Private home rents increased 0.3 per cent in the quarter.

The government measures in January included an increase in the stamp duty for homebuyers by between 5 percentage points and 7 percentage points, with permanent residents paying taxes when they buy their first home. Singaporeans will also have to pay the levy starting with their second purchase.

Office prices climbed 1.5 per cent in the quarter ended June while rentals rose 0.2 per cent, after declining 0.2 per cent in the first quarter, the data showed. Prices of industrial space grew at a slower pace, climbing 0.5 per cent compared with the 2.9 per cent increase in the March quarter. — Bloomberg