Prices of uncompleted homes declined sharply in Q2, which could indicate that developers are lowering prices for new launches.
Recent data from the Urban Redevelopment Authority (URA) showed a 0.9 percent dip in prices of uncompleted non-landed homes, a first since mid-2009.
On the other hand, prices for completed private homes rose 2.3 percent.
According to experts, the decline could be attributed to some of the properties launched in Q2 being located in less popular areas; hence fetched lower prices.
Moreover, stiff competition and more conservative pricing may be another factor for the decline, considering that several new launches were in Pasir Ris and Punggol, where numerous projects have been launched.
Png Poh Soon, Head of Research at Knight Frank Singapore, feels that developers have become less aggressive in terms of pricing.
Instead, they initially launch projects at lower prices and move up gradually when response is good.
“Uncompleted home prices might continue to ease marginally, but it is unlikely to fall significantly unless there are some negative developments in the macroeconomy that bring about concern about a recession,” Png noted.
Meanwhile, Tay Huey Ying, Research and Advisory Consultant at Colliers International, said that the 0.6 percent drop in city centre home prices was steeper compared to the 0.2 percent dip in Q1.
“This could be tell-tale signs of deepening fault lines in the high-end market, where some developers might be beginning to succumb to the pressure of persistent weak demand by reducing price in order to move sales.”
Source PropertyGuru – 2012 Jul 30
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