PRIVATE-home prices inched up an estimated 1.3 per cent in the third quarter as buyer resistance and jitters over the global economic outlook took hold.

The modest rise follows 2 per cent growth in the second quarter and underlines a trend of moderating price rises that has been going on for eight quarters.

Values are expected to continue moderating, with experts estimating gains of between 1 per cent and 2 per cent in the fourth quarter.

But while yesterday’s flash estimates from the Urban Redevelopment Authority point to a softening market, private home prices are still 15.9 per cent above the 2008 peak and 13.4 per cent ahead of the heady days of 1996.

The trend ahead looks to be flatlining or down, say experts, who cite stock market falls and a global economic slowdown coming on top of four rounds of cooling measures.

Buyers are more cautious and price-sensitive, with market activity focused mainly on the more affordable mass-market segment.

Mr Png Poh Soon, Knight Frank’s head of research and consultancy, said concerns over the frail United States economy and the deteriorating euro zone debt crisis have weighed down prices.

‘Sentiment is somewhat affected, leading to a lingering air of caution among home buyers,’ he added.

‘Property investors are also keeping a keen watch over economic developments that will unfold in the coming months. In the worst-case scenario, some are bracing themselves for a recession and a plausible interest rate increase should the capital market freeze up.’

CB Richard Ellis Research executive director Li Hiaw Ho noted that home prices are ‘stabilising’.

Prices rose 5.6 per cent in the first nine months of this year, well under the 14.4 per cent growth in the same period last year, said Mr Li.

Yesterday’s flash estimates highlighted how different market segments are performing.

City centre non-landed home prices increased 0.8 per cent in the three months to Sept 30, down from a 1.6 per cent rise in the previous three months. This was the smallest rise since the third quarter of 2009 when the market first rebounded.

City fringe home prices held steady at 1.1 per cent, while suburban home prices shot up 2.1 per cent from a 1.7 per cent rise in the three months before.

Colliers International’s director of research and advisory, Ms Chia Siew Chuin, said ‘the edging up of (suburban home) prices is supported by sustained, strong underlying demand in the mass-market segment despite global economic uncertainties’.

Mr Ong Teck Hui, Credo Real Estate’s head of research and consultancy, agreed that this was ‘not surprising’ as the mass-market segment has been relatively buoyant, supported mainly by demand from owner-occupiers.

But price gains in the future are likely to be linked to particular projects, as home buyers in this segment are also getting cautious in the light of the economic uncertainties, said Cushman & Wakefield’s Asia-Pacific research senior manager, Mr Ong Kah Seng.

Source: Straits Times, 4th Oct 2011