Private home prices defied an economic slowdown to rise for the second consecutive quarter, prompting an analyst to raise the possibility of more cooling measures.
The Urban Redevelopment Authority's (URA) price index for private homes rose 0.9 per cent from the second to the third quarter, according to flash estimates out yesterday.
This follows the 1.5 per cent rise in the second quarter over the first three months of the year. The index is up 1.7 per cent year on year.
Non-landed private homes led the way, rising 1.7 per cent from the second quarter after a 2 per cent jump from the first to the second quarter.
Prices of landed homes, by contrast, fell 2.2 per cent in the third quarter after dipping 0.1 per cent in the previous quarter.
Increases were recorded across the island.
Prices of non-landed private homes in the prime core central region rose 2.9 per cent quarter on quarter compared with the 2.3 per cent hike in the previous quarter.
The rest of central region prices climbed 1.6 per cent after an increase of 3.5 per cent in the previous three months, while values in the outside central region rose 0.7 per cent to build on the 0.4 per cent lift in the previous quarter.
Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said: "While the housing market may continue to be influenced by global forces, our population growth, rising household income and positive employment numbers will remain key drivers for both home prices and demand over the long term.
"We expect prices to remain relatively stable for the rest of the year."
Mr Brian Tan, regional economist at Barclays, said: "We believe the risk of more macro prudential measures to cool the housing market has risen to a relatively high level following this (data).
"The continued rise in the private residential property price index suggests that its surprising jump in the second quarter was not due to a distortion or measurement error. Instead, it may reflect an ongoing improvement in market sentiment. We believe the Government would view this as out of sync with the darkening economic outlook.
"The Government could act quickly."
Mr Tan noted that it imposed higher stamp duties and lower loan-to-value limits on residential property purchases in July, just days after URA flash estimates showed a continued pickup in prices.
Similar measures are possible this time, or the Government could tighten the total debt servicing ratio framework by lowering the 60 per cent threshold for property loan approvals.
The flash estimates are based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up until mid-September. The statistics will be updated on Oct 25.
PUBLISHED
OCT 2, 2019, 5:00 AM SGTSource: The straits times