The latest property curbs in Singapore have had a cooling effect on the real estate market, leading to a decline in home prices for the first time in three years during the second quarter.

Flash estimates released by the Urban Redevelopment Authority on Monday revealed that private property values slid by 0.4% compared to the previous three months, which had seen a rise of 3.3%. This marks the first decrease since the first quarter of 2020.

The property market had previously enjoyed a robust period, defying a global slowdown experienced in cities like London and Shanghai. However, the momentum appears to be easing as the government implemented measures to prevent excessive price increases. In April, stamp duties for foreign buyers were doubled to 60%, the highest among major markets, and levies for second-home buyers were also raised.

Morgan Stanley analysts Wilson Ng and Derek Chang noted in a Monday report that the recent moderation in prices was likely driven by the latest round of property cooling measures in April. They expect prices to gradually increase for the remainder of the year, projecting a 5% growth for the full year.

Although home prices declined in the last quarter, transaction volume increased by approximately 16% compared to the previous three months, according to the Urban Redevelopment Authority. In May, home sales reached a one-year high as the supply crunch eased due to new development launches.

In a Facebook post following the release of the figures, Singapore’s Minister for National Development Desmond Lee acknowledged the signs of moderation in the property market and emphasized the government’s efforts to increase housing supply to meet demand.

The fervor in Singapore’s property market has also extended to public homes. Housing & Development Board resale prices reached a new high in the second quarter, rising by 1.4% compared to the previous three months, marking the 13th consecutive quarter of gains. In June, a public housing unit was even resold for a record S$1.5 million ($1.1 million).

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