Private Housing Price Hike Contained yet Faster than Expected

Prices of private homes in Singapore rose slightly faster than initially estimated in the first quarter compared with the previous three months, government data showed Friday, but price growth remained markedly slower than in the fourth quarter after tough government curbs sapped demand.

The private residential property price index rose 0.6% in the January-to-March period from the previous three months to a new high of 213.2 points, Singapore’s Urban Redevelopment Authority said in a statement. The index had jumped 1.8% on quarter in the October-to-December quarter.

The URA had estimated first-quarter price growth at 0.5% earlier this month.

Regulators imposed new measures in January, trying to contain prices that have been on the rise since the global financial crisis, despite repeated government interventions.

In the first quarter, prices of non-landed private residences in the core central region rose faster than estimated earlier, up 0.6% on quarter compared to the preliminary print of a 0.4% increase. Prices in this region had risen 0.7% in the October-to-December period.

Prices rose 0.2% in the rest of the central region, the URA said, revising its earlier no-change estimate. Prices in this region had risen 0.9% in the fourth quarter.

But prices outside the central region rose slower than previously thought in the January-to-March period, up 1.4% on quarter compared to the 1.7% rise estimated earlier.

In the fourth quarter, prices in this region had risen 3.8%.

Housing costs have risen almost nonstop–generating much public discontent–since Singapore’s economy recovered from the global financial crisis. Private-home prices have surged nearly 60% after the market’s most recent cyclical trough in the second quarter of 2009.

The January measures, the seventh set of curbs introduced since September 2009, included higher stamp duties, increased down-payment requirements and new borrowing caps on certain buyers. They mainly target foreign investors and local residents who already own homes.

These steps dragged monthly private-home sales to the lowest level in over a year in February, as residential developers cautiously held back launches.