The new cooling measures put the brakes on growth in private property prices in the third quarter.
Prices rose just 0.5 per cent in the three months to Sept 30 compared with the previous quarter, the Urban Redevelopment Authority noted yesterday. This is in stark contrast to the 3.4 per cent jump in the second quarter.
Even with the slowdown in the July to September period, prices were still up by 7.9 per cent in the first three quarters of the year.
Landed property prices rose 2.3 per cent in the third quarter, well down from the 4.1 per cent increase in the second.
Non-landed property values were flat compared with a 3.2 per cent rise in the previous quarter. This marked a significant slowdown, and halted the trend of increases seen in the previous four quarters, said Ms Tricia Song, head of research for Singapore at Colliers International.
Condominium and private apartment prices dipped 1.3 per cent in the city fringe, or Rest of Central Region, as some projects cleared inventory at a discount. They were down 0.1 per cent in the suburbs, or Outside Central Region, as new developments such as the Affinity at Serangoon and Gardens Residences dropped prices, Ms Song said.
JLL national director Ong Teck Hui attributed the price drop in the city fringe to more units being launched. "Of the 3,704 non-landed private homes launched islandwide, 2,338 units, or 63 per cent, were in (the city fringe), with a take-up of just 1,748 units," he noted.
"Competition among new launches in the quarter pressured average (median prices) to $1,733 per sq ft, from $1,833 psf in the second quarter."
Prices in prime areas - the Core Central Region - rose 1.3 per cent in the third quarter after a 0.9 per cent lift in the second. Ms Song said this was underpinned by demand for luxury projects, including 8 Saint Thomas, Wallich Residences, New Futura and Martin Modern.
Sale volumes showed more life in the third quarter, with developers moving 3,012 new units (excluding executive condominiums or ECs) compared with 2,366 in the second.
Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said new sales could have been boosted in part by the last-minute buying of about 1,000 units on the night of July 5 before the cooling measures took effect and more new launches. There were 3,754 uncompleted private units (excluding ECs) released for sale in the third quarter compared with 2,437 in the second.
Ms Sun noted: "Developers were generally pressing ahead with their launches as past trends showed that buyer sentiment usually recovers within three months after each round of cooling measures.
"Some developers may be... paring down inventory to avoid paying penalties for unsold units after five years."
She added that some buyers may see this as an opportune time as future projects are likely to be launched at higher prices due to higher land acquisition costs.
No EC units were put on sale in the third quarter, but developers sold 84 homes from past launches. By comparison, 628 units were launched in the second quarter, with 762 sold.
Transaction volumes overall fell 19.8 per cent to 5,765 in the third quarter from 7,186 in the second.
"Though the measures had a substantial impact on demand, it is not as bad as when the total debt servicing ratio was implemented in 2013... (which resulted in) a 42.2 per cent drop, quarter on quarter, in the third quarter that year," said Ms Christine Li, senior director of Cushman & Wakefield research.
"The strong sales momentum in the second quarter has been tempered by the measures and Hungry Ghost month," Ms Sun said.