Slump in private home resale market in March

SRX data shows March volumes down by about 50% year on year

THE private home resale market took a major hit last month from the seventh round of cooling measures unveiled in January.

Resale volumes in March slumped by half from the same month last year.

The impact on prices was more muted, though, as average resale prices slid 2 per cent from February, Singapore Real Estate Exchange (SRX), a consortium of the country's leading property agencies said yesterday.

A total of 609 transactions were recorded in March by SRX. This was 87 per cent higher than in February, as Chinese New Year fell within that month. But analysts noted that the figure was about 50 per cent lower than March last year.

Condo resale volumes for the January to March period were also nearly 40 per cent lower than the preceding quarter.

DWG senior manager Lee Sze Teck cited sellers' "reluctance" to lower prices. This contrasts with the new sales market, where developers have been quick to offer incentives to offset the impact of cooling measures, Mr Lee said, pointing out that new sales rose by about 12.5 per cent in the first quarter from the preceding one.

But though volumes have come down sharply, prices did not follow suit in March.

The dip in condo resale prices was largest in the suburban region, which posted a 3 per cent decline to $1,071 per sq ft on average. That is still above the psychologically daunting $1,000 psf threshold that suburban condo resale prices exceeded for the first time in February this year.

City centre average resale prices dropped 2 per cent to $1,788 psf, while city fringe prices stayed largely flat at $1,301 psf on average last month, SRX said in its flash report.

"As long as interest rates stay low, holding costs are low and sellers are not compelled to cut prices," said ERA Realty key executive officer Eugene Lim.

Softening prices combined with higher rents boosted rental yields islandwide last month.

The city fringe had the highest gross rental yield at 3.8 per cent, followed by suburban yields at 3.7 per cent. The city centre had the lowest rental yield at 3.1 per cent.

On a quarterly basis, however, overall condo resale prices grew 4.2 per cent, owing to stronger increases in January and February, SRX said.

A DTZ report yesterday said price growth across most non-landed segments slowed by more than half in the first quarter compared with the fourth quarter last year.

But sequential price growth in the first quarter was stronger than in the corresponding period last year, which was immediately after an additional buyer's stamp duty was imposed for the first time.

This could be due to buyers "getting accustomed" to the duty and earlier tighter loan restrictions, said DTZ.

March's flash report is the first time SRX has used a weighted average to compute overall average resale price.

Without this, noted OrangeTee research and consultancy head Christine Li, March resale prices would have increased from February.

melissat@sph.com.sg