What goes up must come down. And at long last, prices of non-landed private residential properties fell in Q3 2008.

For the second consecutive quarter, the luxury condo/apartment segment saw a price drop – this time it was a whopping 4.2% drop, quarter-on-quarter (q-o-q).

Outside the prime districts, prices of freehold resale condo/apartments eased 1.3%.

Firm demand for landed homes helps to stabilise resale prices in that property segment. Moreover, finite supply and foreign ownership restriction have ensured that the resale prices are not subjected to frequent price fluctuation like condos and apartments do.

The Urban Redevelopment Authority’s (URA) flash estimates for Q3 2008 also registered a fall in overall private residential prices.

In the Core Central and Rest of Central regions, prices of non-landed private housing slid 2% and 2.1% respectively. However, prices for condos and apartments in the Outside Central Region inched up 0.1%.

In the new home segment, developers sold only 320 and 376 units respectively in August and September 2008 – a far cry from the 897 units sold in July 2008.

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A Hotel 81 subsidiary has put in the sole bid of $51 million for the hotel site at Kallang Road/Jellicoe Road in a state land tender conducted by the URA.

With a plot ratio of 4.5, the future hotel will have a permissible gross floor area (GFA) of 204,363 sq ft.

If awarded, the developer’s costs will be around $249.56 per square foot per plot ratio (psf ppr).

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The 15-year leasehold office site launched by the URA recently is expected to fetch bids of 15-40 per cent lower than a nearby site sold in January this year, due to the property market slump. And analysts are questioning the wisdom of the government releasing office sites despite a glut of office space expected to be in the market by 2010.Meanwhile, a UBS report said that monthly prime office rents may drop by as much as 41-47 per cent should there be a 1.5 – 6 per cent job reduction in the financial industry.

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HDB resale flats are generally 50 % more expensive nearer to the city than those farther away.In 1996, the difference between inner city flats and the national average was only around 11 per cent. Now it is around 50 per cent.

For instance, Bukit Batok flat would now sell for about $303 psf while the Queenstown flat commands $458 psf. And the price gap is expected to widen still with factors like increasing transport costs would make demand for inner city flats to increase.

January to July figures showed that resale prices of four- and five-room flats in estates near the Central Business District were about 48 to 52 per cent higher than the national average.

Popular locations include Smith Street, Tanjong Pagar Plaza, Cantonment Close, Jalan Membina and Stirling Road.

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An industrial facility in Changi Business Park Vista was sold for S$63 million to Hamburg-based property management company Union Investment Real Estate, on a sale and leaseback term.

The 198,000 square foot Applied Materials Building is Union’s second investment in Singapore, following the purchase of two office buildings in 2007.

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SINGAPORE, Oct 24 (Reuters) - Singapore private home prices fell 2.4 percent in the third quarter, worse than an initial estimate of a 1.8 percent drop as the property market weakened sharply at the end of September.

Rents during the July-September period fell 0.9 percent after gaining 2.5 percent in the three months to June, the government’s Urban Redevelopment Authority (URA) said on Friday. Homes in prime areas registered the biggest price decline of 2.7 percent.

“We know the property markets turned so the revised figures were not a huge surprise. It’s more than likely the fourth quarter will see a sharper decline,” said Song Seng Wun, Singapore-based economist at Malaysian investment bank CIMB.

The fall in Singapore home prices in the three months to September marked the first decline in four years and coincides with the economy’s descent into recession during the quarter.

Demand for government-built HDB apartments remained firm during the third quarter as prices gained 4.2 percent, a separate index from the Housing Development Board showed. The increase was, however, slower than the second quarter’s 4.5 percent gain.

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The sales in the private property market have been sluggishsince the start of the sub-prime mortgage crisis last year. Several property developers have also delayed the launch of their properties due to the negative sentiment.

The Urban Redevelopment Authority (URA) has also released data showing the low take-up of private residential properties. 767 units were launched for sale inSeptember, but the number sold was only 376 units. This was only a slightimprovement from 320 units sold in August. The sales in September were due mainly to launches at Concourse Skyline (68 units sold), The Peak At Balmeg (47), Traselveo (41), Viva (19) and Mulberry Tree (13).

Sales are expected to continue to be slow going forward, at least for the next year.

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From next year onwards, a new CPF rule will kick in regarding how much a member needs to return to the CPF when he sells his home.

Currently, home owners aged 55 and above do not have to refund their CPF accounts when they sell their properties, unless they have pledged their homes to meet their Minimum Sum requirement. In that case, they will pay back to the CPF the amount they have pledged their home for - with accrued interest.

But from 1 January 2009, all home sellers over 55 who use CPF funds to pay for their properties will have to pay back this money - plus accrued interest - up to their Minimum Sum requirement.

For simplicity, consider the case of Mr Tan, a 58-year-old home owner whose Minimum Sum requirement is $90,000.

He has only $30,000 in his retirement account, so his shortfall is $60,000. To help make up for this difference, he has pledged his property for $45,000.

If Mr Tan sells his property this year, he will pay back to the CPF the original $45,000 which he has pledged the property for, plus accrued interest, which can be another $5,000 to $6,000 more.

If he sells his property next year under the new rule, he will have to pay back the amount he has withdrawn, capped at his Minimum Sum deficiency - that is, $60,000.

This rule change, which was first announced during the Budget debate last year, will not affect those under the age of 55, or who turned 55 before 1 July 1995.

The Minimum Sum that applies to any individual CPF member depends on the year he or she turns 55. Those turning 55 between 1 July 2008 and 30 June 2009 will have a Minimum Sum of $106,000, for instance.

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With the US financial firms falling like dominoes, rental rates for prime office space in Singapore will be affected because financial firms form the biggest demand for such office.

Gains in Singapore office rents will be limited as global economic growth slows. Lehman, which this week filed the biggest Chapter 11 bankruptcy in history, occupies office space in Suntec Real Estate Investment Trust’s Suntec development. The firm has about 270 employees in Singapore.

And rentals may drop further with the coming on-stream of more office space with the completion of the 2.6 million sq ft Marina Bay Financial centre.

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