New measures slowing growth for private property

The property price index for private property climbed a mere 2.9% to 189.6 in 3Q, the lowest percentage increase for the last few quarters, while growth for the Core Central Region (CCR) was the lowest at just 1.6%.

The index for the rest of Central Region (RCR) and Outside Central Region (OCR) inched up just 2.3% and 2.2% respectively.

“The impact of the cooling measures announced by MND and HDB on 30 August are evident,” observes PropNex CEO Mr Mohamed Ismail. “Investors and upgraders holding back in the immediate wake of the announcements are probably what stunted the growth and this is partly responsible for the 16% drop in the total number of units transacted to just 8,513.”

Ismail expects the price index to reach a plateau in 4Q10 with another 2% growth at most. “The reason is that buyers of private properties are now being more price-conscious across all markets,” he said, citing the private property sales in September which saw only 39 transactions above the $2,000psf median price mark, the lowest for the year so far. He also recalled  that almost 40% of all the private property units sold in September came from the very attractively priced NV Residences.

“With the lower Loan-To-Value ratio and higher Minimum Cash Payment, developers will have to be reasonable in pricing their units if they want to continue to attract consumers," Ismail said.