Singapore private home market shows positive signs

Resale prices of private non-landed properties rose 0.2 per cent last month, but are still down about 1.7 per cent from a year back, says SRX Property. Resale volumes fell about 16.8 per cent last month from July, but they are 15.9 per cent stronger
Resale prices of private non-landed properties rose 0.2 per cent last month, but are still down about 1.7 per cent from a year back, says SRX Property. Resale volumes fell about 16.8 per cent last month from July, but they are 15.9 per cent stronger than in August last year.PHOTO: BLOOMBERG

Resale prices of non-landed properties inch up in August

SINGAPORE - Newly released figures on resale prices and volumes for condominium units and other non-landed private homes in Singapore offer glimmers of encouragement for both buyers and sellers.

SRX Property said on Tuesday that resale prices of private non-landed properties inched up 0.2 per cent last month (August), but they are still down about 1.7 per cent from a year back.

Prices are also 6.5 per cent lower than their most recent peak in January last year, SRX said.

Compared with a year ago, resale prices of units in the central region fell 6.2 per cent and those in the suburbs slid 2.9 per cent. But city fringe homes bucked the trend, by rising 7.1 per cent from a year back.

This could be due to transactions of smaller units in the area, said SLP International executive director Nicholas Mak. The region has a greater proportion of shoebox units which are popular with investors.

Prices of units on the city fringes have also fallen the least from their respective recent peaks, SRX said.

They are down 5.1 per cent from their recent peak in August 2013, while prices of units in the central area have fallen 10.5 per cent from October 2013, and those in the suburbs are 7.1 per cent below prices in June 2013.

Resale volumes of non-landed properties fell an estimated 16.8 per cent last month from July - no surprises given the Hungry Ghost Festival, which started on Aug 14.

But resale volumes are a hefty 15.9 per cent stronger than in August last year, "a strong signal that more buyers are entering the market", said ERA Realty key executive officer Eugene Lim. "This is as resale prices are more stable now and sellers looking to sell are also more willing to negotiate."

Resale volumes should continue to be bolstered by stabilising prices, which will draw more buyers back to the market, he added, forecasting a total of 6,000 resale non-landed transactions for all of this year.

In comparison, there were just 4,088 resale non-landed transactions for all of last year, according to caveats.

SRX's flash estimates showed resale prices of private non-landed units in the central region fell 0.5 per cent month on month, while those in the suburbs fell 0.2 per cent and prices of city fringe units rose 1.8 per cent.

Experts expect the resale market to be quieter for the rest of the year given the year-end slowdown. Still, the launch of several large projects in the coming months could spell more buyer interest in resale properties in these areas, said R'ST Research director Ong Kah Seng.

Likely launches include UOL and Kheng Leong's 663-unit Principal Garden in Prince Charles Crescent and the 288-unit Thomson Impressions in Lorong Puntong in Sin Ming by Nanshan Group.

The overall resale price index should hover around similar levels or fall slightly, said SLP's Mr Mak.

One key factor is the Ministry of Manpower's announcement in July that it will raise the minimum salary bar for Employment Pass (EP) holders who seek to bring their families here, from $4,000 to $5,000 a month. "The new rule is likely to discourage incoming EP holders who are looking to relocate here and existing EP holders who intend to settle here with their families," he said.

"This group... represents a significant proportion of the total leasing demand (and should) dampen overall leasing demand, which could eventually result in declining investment demand for non-landed properties."

The risk of a regional economic slowdown and hikes in interest rates could adversely affect real estate investment demand as well, he added. Overall private property prices are tipped to continue sliding, barring any changes to cooling measures.

A version of this article appeared in the print edition of The Straits Times on September 09, 2015, with the headline 'Private home market shows positive signs'. Print Edition | Subscribe