UPDATE 1-Singapore housing market cools, but only at high-end
On Monday 3 October 2011, 13:39 SGT
(Adds resale prices for public housing, analysts comment)
SINGAPORE, Oct 3 (Reuters) - Singapore private home prices rose at a slower pace during the third quarter but resale prices for government-built apartments that cater to the mass market rose at a faster pace, indicating strong underlying demand for property in the city-state.
The Urban Redevelopment Authority (URA) said private home prices rose 1.3 percent in July-September from the previous three months according to flash estimates, the slowest pace since the rally started two years ago.
However, preliminary estimates from the Housing and Development Board (HDB) showed resale prices rose 3.8 percent during the third quarter, accelerating from the 3.1 percent gain in the second quarter.
About 80 percent of Singapore's 5.1 million people live in HDB apartments.
"The underlying demand in the HDB segment is still there," said Vikrant Pandey, an analyst at UOB Kay Hian.
"Supply is limited and even though the government is planning to add more units, this hasn't materialized yet and it will take 2-3 years before we see larger supply coming onstream, so there's some upward pressure on the HDB side."
Singapore has been trying to stem the rise in home prices by increasing the supply of land available for housing and reducing the amount people can borrow for second properties.
On private property, URA said the biggest increase was for homes outside the central region, which rose 2.1 percent during the third quarter. In contrast, private home prices in the core central region edged up by 0.8 percent.
Colliers International said although prices are still rising, home buyers have become more cautious because of the grim global economic outlook.
"With prices now far exceeding historical peaks, home buyers are increasingly becoming resistant towards price growth and this has capped price growth to some extent," said Chia Siew Chuin, director of research & advisory at Colliers International.
The URA and HDB flash estimates are based primarily on data from the first 10 weeks of the quarter. (Reporting by Kevin Lim and Charmian Kok)
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