By Mr. Propwise

From the URA’s recent flash estimate of the 1Q2012 private residential property price index, property prices have begun their long awaited decline. Prices were down 0.1% in the first quarter on a quarter-on-quarter basis.

But at the current levels the price index is still 16.1% above the previous 2Q2008 peak, and 13.6% above the previous all time high in 2Q1996.

Figure 1 – URA Property Price Index

This estimated decline of 0.1% comes after the rate of growth of the PPI had slowed for 9 consecutive quarters, i.e. property price growth had been decelerating continuously. This is likely due to concern over the slowing economy, worrying global economic situation especially with the troubles in Europe and weak growth in the US, combined with the dampening effect of multiple rounds of government measures.

Sharp or Gradual Decline?

Figure 2 – Change in Property ...