By Lynda Hong | POSTED: 28 Sep 2013 00:53 | CNA

SINGAPORE

Property prices in Singapore are expected to hold up firmly in the third quarter this year, despite sales transactions likely to come in lower in the same quarter – by almost half from the second quarter.

This is the expectations of analysts ahead of the release of third-quarter property sector flash estimates by the Urban Redevelopment Authority (URA).

Save for a few launches like Tembusu in suburban Kovan, the third quarter of 2013 has been seasonally quiet – mainly due to the Hungry Ghost Festival Month.

But this year, the latest measures to curb housing loans have kept developers at the sidelines – hesitant to launch more projects.

Introduced in June, the total debt servicing ratio (TDSR) framework limits how much property buyers can borrow to buy homes.

This is because banks now have to check if a borrower’s total repayments of car, student or mortgage loans do not exceed 60 percent of their gross income.

Analysts forecast transactions of new and resale private properties in the third quarter to be half of second quarter’s.

But residential property prices, led by new projects, should continue to grow, albeit marginally.

PropNex said URA’s flash estimates for the third quarter, to be released this Tuesday, should see prices of suburban homes grow by 2 percent.

But because prices of properties in the city and city fringes are expected to drop by 0.2 to 0.5 percent, URA’s Q3 private residential property price index should grow by 1 to 1.5 percent from the second quarter.

Mr Mohd Ismail, CEO of PropNex, said: “Many of the new launches are still holding at a very high price. This is mainly translated to the fact that the land bid prices were high for the last one year, and today when many of the launches take place, prices still remain high. As such, even though the volume has dipped much, to a significant percentage, but the prices are still holding.”

Analysts also expect developers to sell more new private homes in the fourth quarter.

Mr Desmond Sim, Asssociate Director of CBRE Research, said: “Q4 for new sales will be a function of new launches. Whether developers will put out new products on the market, we predict new launches to be about 3,000 to 4,000 units. And we predict the take-up rate to be in the region of 2,000 to 3,000. I think performance wise, it will be quite flat if not slightly lesser than the third quarter. But in terms of new sales, CBRE expects a total 15,000 units to be sold the whole year.”

URA’s flash estimates will be based on transaction prices from caveats lodged during the first 10 weeks in the third quarter.

New projects like Sky Vue and Thomson Three, launched only in the second half of September, will contribute to the actual price index, which will be released at the end of October.

– CNA/de

http://www.channelnewsasia.com/news/business/singapore/singapore-s-property/828970.html