Residential property prices in Singapore have suffered an unexpected further decline in the second quarter of 2009 despite a frenzy of buying, according to the latest official figures.
Prices fell 5.9% from April to June following an even steeper 14.1% decline in the first quarter of the year, the data from the Urban Redevelopment Authority show.
However the real estate industry had hoped the figures would be more positive as demand had risen strongly, especially in June. Some had even predicted that there would be price increases.
However others have warned that the idea of a buying frenzy with speculators rushing to snap up newly released property was pure fantasy.
“A price rise was expected by many, because of the buying craze in May and June, which saw project launches attracting increasing numbers of investors and speculators,” said one broker.
But there is still a weak economic climate and analysts believe that property investors are still treading with caution and any perceived frenzy is unsustainable. Strong liquidity and a stock market surge have not been enough to tempt buyers.
But analysts with international property consultancy firms disagree. Figures from CB Richard Ellis indicate that 4,000 new homes were sold in the second quarter, up an astonishing 50% on the first quarter. This led to some developers raising their prices.
CBRE Research director Li Hiaw Ho said the 5.9% per cent decline in property prices does appear to be a huge contradiction to the current market perception. He believes that actual price levels in the second quarter have risen to more than 10% from the first but this is not reflected in the official data.
Chua Chor Hoon, head of south East Asia research at DTZ was also surprised by the published figures. He agreed with Ho that prices picked up in June and described the official figures as ‘surprising’ especially in some of the most popular locations.