SINGAPORE (Nikkei Markets) -- Prices of Singapore private residential properties fell 0.1% in the second quarter, or by less than what was indicated in flash estimates released earlier this month, in yet another sign the housing market has bottomed.
The latest data from the Urban Redevelopment Authority on Friday also showed the number of unsold residential units in the pipeline fell for the sixth straight quarter, while rents for private homes dropped 0.2% quarter-on-quarter in the April-to-June period compared with a 0.9% decline in the previous quarter.
The URA had previously said private home prices fell 0.3% during the April-June period, marking the 15th straight quarter of decline. The price drop in the first quarter was 0.4%.
Singapore's residential property market has showed signs of bottoming in recent months amid a jump in apartment sales and as developers bid aggressively at government land auctions. According to URA's data, developers sold 6,039 units in the first six months of this year compared with 3,675 units in the same period last year.
On Thursday, a residential site in north-eastern Singapore attracted 16 bidders, with the highest bid of S$446.28 million ($327.8 million) coming from a joint venture involving Keppel Corp.'s property arm and Wing Tai Holdings. Analysts said the price offered by Keppel and Wing Tai was 14% higher on a per square foot basis than what a developer had paid for a nearby site in 2014.
"The market has achieved another data point of a minute price correction, which further reinforces the point that the trough of the market is here," said Desmond Sim, head of CBRE Research for Singapore and South East Asia. "Take-up of new homes for the past two quarters has exceeded launches - a good sign for unsold inventory, which was pushed down further to 15,085 units."
According to URA, prices of non-landed properties such as apartments in Singapore's core central region fell by 0.5% during the quarter, compared with the 0.4% decrease in the previous period.
But prices of non-landed properties in the rest of central region -- which refers to homes at the edge of the city-centre -- increased by 0.6%, compared with the 0.3% increase in the previous quarter.
Prices of non-landed properties in the outside central region, which covers most suburban homes, decreased by 0.3%, compared with an increase of 0.1% in the previous quarter.
"We are witnessing broad-based demand from all segments of the private residential segment and this sentiment looks set to continue for the rest of the year," said Ismail Gafoor, chief executive officer of PropNex Realty, Singapore's largest firm of real estate agents.
About 80% of Singapore residents live in government-built HDB apartments, leaving private developers to cater to the remaining one-fifth of the population.
Turning to the office market, URA said prices of office space fell 1.4% quarter-on-quarter during the April-to-June period, slowing from a decline of 4% in the previous quarter. Rents for office space fell by 1.1%, compared with the decline of 3.4% in the previous quarter.
The net amount of occupied office space increased by 1,000 square meters during the quarter, reversing from the net decrease of 6,000 square meters in the preceding period, URA said.
The island-wide vacancy rate rose to 12.4% from 11.6%, however, due to the bumper supply of 76,000 square meters of office space that came on the market during the second quarter, which was more than double the previous quarter's 31,000 square meters.
In the retail market, prices of retail space decreased by 3.2% compared with the fall of 4.0% in the previous quarter. Rents also eased at a slower pace, declining 1.2% in the second quarter of 2017 compared with the drop of 2.9% in the previous three-month period.
Although there was increased demand for retail space during the quarter, supply rose by a higher quantum, resulting in a rise in the island-wide vacancy rate to 8.1% from 7.7% at the end of the previous quarter.
CBRE's Sim said vacancy rates for retail space are expected to rise further as retailers in Singapore are grappling with lacklustre sales and are still undergoing consolidation. Brick and mortar retailers will also continue to lose ground to e-commerce, with competition expected to pick up with the launch of Amazon Prime Now earlier this week.
"Still, retail space supply will taper off significantly post-2018, which will help allow the market to equalise," he said.