Singapore home prices may drop further, says StanChart

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Home prices here will probably fall further before the housing curbs introduced in the past five years are scaled back, said Standard Chartered’s Mr Lim Cheng Teck, chief executive officer for the Association of Southeast Asian Nations region.

The city-state’s private home prices dropped by the most in almost five years following a campaign that started in 2009 to curb property market speculation.

Government measures included taxes on property sales, additional levies on foreign buyers and mortgage limits.

Under Singapore’s loan framework, lenders must consider a borrower’s total debt when granting mortgages, the Monetary Authority of Singapore said last year.

A borrower’s loan repayments, including mortgages, should not exceed 60 per cent of income, based on the policy guidelines.

Some developers that have cut prices by 10 to 15 per cent are drawing buyers.

Urban Redevelopment Authority data showed that private residential prices fell 1.3 per cent in the first quarter, following a 0.9 per cent drop from the previous three months. The latest decline is the largest since June 2009.

Declining home sales also eased demand for housing loans. Mortgages increased only 7.9 per cent in March, the slowest pace since June 2007, data from the central bank showed.