S’pore’s housing market facing tough times

[celine.lim]

"Singapore’s housing market, which has posted seven straight quarterly declines in home prices, may face harder times ahead.

The latest housing data point on Wednesday showed home sales slumped 42% in June from a month earlier to the lowest this year — fueling concerns of further declines in prices that have already recorded the longest losing streak since 2002.

“The momentum is very weak, it doesn’t bode well for the residential market,” said Alice Tan, Singapore-based head of consultancy and research at brokerage Knight Frank LLP, who predicts housing values may drop as much as 5% in both 2015 and 2016.

The latest decline in sales and prices reflect the government’s residential property curbs since 2009 to combat low interest rates that drew demand from foreign buyers. The measures intensified over the years to include a cap on debt repayment costs at 60% of a borrower’s monthly income and higher stamp duties on home purchases.

Home sales last month dropped to just 375, about half the level Tan said is needed for a “healthy market.” That’s also the lowest number of transactions for the month of June based on data going back to 2007.

Housing transactions slid as developers held off new housing projects, leaving only a handful of developments being put up for sale.

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