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Condo prices fall 0.3% in Dec

PropertyGuru

By Romesh Navaratnarajah: Prices of condominiums and private apartments in Singapore fell 0.3 percent in December 2012 after climbing 1.7 percent in the previous month, according to flash estimates for the National University of Singapore's (NUS) Singapore Residential Price Index (SRPI) and reported by The Business Times.

Excluding small units, the Central Region – which covers districts 1 to 4 (including Sentosa Cove and the financial district) – recorded the biggest decline at 1.3 percent month-on-month in December, while prices in the Non-Central Region climbed 0.5 percent.

NUS' flash estimates also showed that prices of small units (up to 506 sq ft) remained unchanged across the island.

With the implementation of the latest cooling measures, Lee Sze Teck, Senior Manager at DWG expects the small unit sub-index for January to rise given the lower loan-to-value (LTV) limit imposed on purchasers taking out their second housing loan.

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"Buyers are likely to adjust their budgets downwards because of the lower LTV ratio and look to buy smaller units."

Meanwhile, the price gap between newly launched homes and resale units is expected to narrow this year as developers offer competitive pricing to sell more units, said R'ST Research Director Ong Kah Seng.

At the same time, Lee Lay Keng, Associate Director at DTZ said more private homes will be completed this year at over 16,000 units compared to 2011 and 2012's average of 11,000 units. She added that this could put pressure on home prices, as buyers tend to sell properties in the sub-sale market around the period of a project's TOP.

"However, prices are not expected to fall sharply due to developers' strong balance sheets and owners' holding power. Buying demand will still be healthy albeit lower - due to the current low-interest rate environment and tight employment market." Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@allproperty.com.sg Related Stories: S'pore rents still among highest in Asia

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