The surprise rebound in prices for landed homes at the end of last year does not spell recovery, with analysts warning that they could face more pressure this year.
Prices rose 0.9 per cent from the third to fourth quarter last year – the first such increase since the third quarter of 2013.
The uptick was a sharp reversal from the 2.7 per cent decline recorded from the second to the third quarter, according to Urban Redevelopment Authority data on Tuesday.
They fell 14.8 per cent from the third quarter of 2013 to the same point last year – have wooed buyers back to landed homes, putting a floor under values in the process.
Despite the slight increase in the fourth quarter, landed home prices still posted a 4.4 per cent drop for the whole of last year, following falls of 4.1 per cent in 2015 and 5.3 per cent in 2014.
The landed home market has suffered since the total debt servicing ratio was imposed in June 2013. This limits a borrower's total monthly debt obligations to a maximum of 60 per cent of the individual's monthly gross income.
Market watchers expect landed home prices to either remain flat or fall at a more gradual pace this year.