(Bloomberg) -- Singapore home prices fell less than estimated in the third quarter, as a spurt of new property sales in late September pared the decline, while rents rose for the first time since 2023.
An index of private residential valuations dropped 0.7% from the previous three months, Urban Redevelopment Authority figures showed Friday. The final number compares with an earlier estimated decrease of 1.1%, which only considered transactions up to mid-September.
The first drop in home prices in five quarters came after sales slowed due to rising interest rates and purchasing curbs. Developers are banking on it being a blip as borrowing costs begin to fall and buyers show enthusiasm for recent residential projects.
At the same time, rents for private homes gained 0.8%, a reversal from a 0.8% drop in the second quarter and ending three consecutive quarters of declines.
That could add to worries about housing affordability in the financial hub that have risen after a sharp spike in private home prices and rents during the pandemic. Authorities have implemented multiple measures to cool the market as the ruling People’s Action Party seeks to allay voter concerns ahead of an election due before the end of next year.
The government is seeking to ramp up housing supply with plans to auction the most private residential land in more than a decade. The URA said Friday that about 52,200 new private housing units will be completed over the next few years.
But developers have been pushing back project releases and submitting low-priced and selective bids for land plots. That’s kept home values elevated even as transactions decline, and developers have indicated they are unlikely to lower prices even if new sales are on track for their weakest since 2008.
Pockets of local demand have buoyed sentiment. Developers sold 1,160 new private residential units in the third quarter, a 60% increase from the prior period. These include one project in the prime district of Bukit Timah that sold just over half of its 158 units in September.
A separate project released last weekend by City Developments Ltd., the country’s largest listed developer, was the best-selling launch this year, with 84% of its 348 units sold. This was despite an average transaction rate of S$2,067 ($1,567) per square foot, a record for the northern suburban neighborhood near Singapore’s border with Malaysia.
The performance of the Norwood Grand project could “exert upside pressure” on private residential prices in the fourth quarter, Citigroup Inc. analyst Brandon Lee wrote in a note this week.
(Updates with more context, charts from fourth paragraph)
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