Bull run over for Singapore property, prices fall 5.7 pct

Agence France-Presse

Prices of private homes fell 5.7 percent in the fourth quarter, following a 2.4 percent drop in the preceding period, according to the latest data from the Urban Redevelopment Authority (URA), the state agency responsible for land use planning.

The fourth quarter marked the sharpest drop in home prices in a decade, the URA said.

"Further contraction is on the way," analysts from the Hong Kong-based CLSA brokerage and investment group said in their outlook for the property sector.

"We continue to expect the URA index to see an accelerated fall in the next quarter," they said. Local home prices have not fallen so far since 1998 when Singapore was stung by the Asian financial crisis that pushed the local property sector into a slump lasting until 2005, when the government approved the construction of two multi-billion-dollar casino complexes.

By 2007, real estate giant Jones Lang LaSalle was describing Singapore's market as the world's hottest.

Rents at condominium units favoured by the many expatriates here also dramatically increased, and in some cases doubled. While fourth-quarter data is preliminary, analysts say the casino-inspired property boom is history now that the economy is in recession.

Analysts said the duration of the current property slump was difficult to predict but they agreed it will hinge on when Singapore pulls out of the recession.

"A lot of it depends on the economy," said Ong Choon Fah, executive director with DTZ real estate consultancy. "The economy really underpins the market... People have to feel safe about their jobs. That is the first thing," she said.