Many experts said the preliminary figures made up the smallest quarterly growth since Q2 2009.
“The confluence of a variety of factors, such as the market cooling measures including those imposed in January 2011, the ramped up state land supply, a cautious economic outlook and increased prudence and price sensitivity have worked to contain price growth,” said Chia Siew Chuin, Director of Research & Advisory at Colliers International.
Factoring in the worsening economic situation, Mohamed Ismail, CEO of PropNex Realty, said home buyers and investors may be taking a more cautious approach when buying private homes and “signs of lower land bid prices may indicate that prices will be adjusting to the market demands in the private residential market in the coming months of the year.”
Li Hiaw Ho, Executive Director at CBRE Research, said the price growth last year was mainly supported by mass market projects in the Outside Central Region (OCR), which saw a price increase of 0.5 percent.
Meanwhile, private property prices in the Rest of Central Region (RCR) have remained unchanged, while private property prices in the Core Central Region (CCR) and the OCR climbed 0.5 percent and 0.6 percent respectively.
Looking ahead, Li expects demand for new private homes to fall by between 15 and 20 percent, as part of the demand can also be satisfied by executive condominiums (ECs).
“Prices of luxury/prime residential properties may fall by 10 percent to 15 percent in 2012 and mass-market homes by five percent to 10 percent. Separately, landed home prices will likely see a smaller correction of less than five percent since foreigners are generally not allowed to buy and supply is limited.”
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