Knight Frank says it is impossible to predict how much further markets will fall during 2009
By ARTHUR SIM
HOME prices in Singapore have been among the hardest-hit worldwide, with the city state ranking 34th out of 42 countries in Knight Frank's Global Home Price Index. The index, based on the latest government and central bank data, tracks price movements quarterly. It shows that in Q4 2008, private housing prices here fell more than 6 per cent year on year, after rising more than 30 per cent a year earlier - the fourth-fastest rise worldwide.
Singapore's dramatic drop in the rankings is only second to that of Iceland, which plunged 31 places after a 14 per cent dive in prices to 38th position in rankings.
Prices rose fastest in Dubai (up 59 per cent), followed by Russia (19.7 per cent) and the Czech Republic (19.6 per cent).
Countries where prices fell the steepest were Latvia (down 33.5 per cent) and the UK (14.7 per cent).
Although Dubai was the strongest performer in 2008, Knight Frank said much of the gain could be 'wiped out' this year. 'No market will escape unscathed from the global financial crisis, although the scale of the impact will vary according to the structure not just of the housing markets themselves but also the underlying economies,' it said.
More than 80 per cent of locations in the firm's global index recorded price falls in the final three months of 2008, compared with 27 per cent in Q4 2007. Prices increased more than 10 per cent in seven countries in 2008, but values have now started to fall in six of these.
Knight Frank's head of international residential research Nicholas Barnes said: 'Predicting how much further markets will fall during 2009 is virtually impossible.' He said it does not follow that a country that entered the downturn ahead of another country will recover faster.
In Singapore, Knight Frank said the prime Core Central Region suffered the biggest quarter-on-quarter price fall in Q4 2008 at 6.5 per cent. In the mid-tier Rest of Central Region, the drop was 6.2 per cent. And in the mass-market segment, it was 5.9 per cent.
A separate report by CBRE Research shows luxury home prices in Singapore - currently the highest in Asia - fell 13 per cent quarter on quarter in Q4 2008 to US$1,388 per sq ft. In Hong Kong, they fell a steeper 31.4 per cent to US$1,314.5 psf, while in Ho Chi Minh City the drop was 9.8 per cent to US$427 psf. In Thailand, Indonesia and the Philippines, luxury home prices remained unchanged.
CBRE said that in Singapore's luxury condo segment - units costing $2,500 psf or more - only about 140 units were sold in 2008, way down from 900 in 2007.
Foreigners are typically the main buyers of luxury and investment-grade properties here, but CBRE said the number of foreign buyers in 2008 plunged 80 per cent from 2007. By end-2008, luxury prices here had fallen by 30-35 per cent year on year.
Luxury rents were hit by the weak market sentiment and an overhang of new supply. In Singapore, the average figure eased 3.4 per cent to US$3.96 psf per month. In Hong Kong, it fell a steeper 23 per cent to US$4.38 psf per month.