(B) The overall performance of Private Residential Property segment

[B.1] Q1 2009 suffered the largest fall in private home prices since 1975

According to the URA flash estimate released on 1 April 2009, private home prices fell 13.8% in the first quarter (Q1) of 2009 compared with the 6.1% decline in the final quarter (Q4) of 2008. It nearly tripled the 4.7% fall for the whole of 2008, after the spectacular prices surge of 31.2% in 2007.

The price fall in Q1 2009 is the largest since the index started in 1975. The sliding momentum gathered force in Q4 2008 where overall private home prices lost a massive 6.1% before culminating to the ‘big splash’ in Q1 2009. The situation is not helped by developers slashing prices so as to lighten their heavy supply over-hang.
 
URA also released the flash estimates of the price changes in the three geographical regions for Q1 2009. Prices of non-landed private homes fell by 15.2% in Core Central Region (CCR), 17.2% in Rest of Central Region (RCR) and 7.5% in Outside Central Region (OCR) in Q1 2009. See table below for the quarter-to-quarter price movement since the market bull-run in Q1 2007.

In all, the bulk of the price gains achieved over the past six quarters beginning Q1 2007 have been wiped out. And after the biggest thumping of the overall prices in Q1 2009, subsequent price falls could well be much smaller. After all, buying activities are clearly on the rise, especially at the mass-market segment where prices have come down to an affordable level and demand from the HDB heartlands is still going strong.

Prepared by Sam Gian - Independent Real Estate Sales Trainer