SINGAPORE - The private residential property segment appears to be bottoming as prices fell at a slower pace, while transactions increased in both the new sales and resale market.
However, it may be too soon to pop the champagne as market recovery is unlikely to be rapid nor sharp.
Latest figures from the Urban Redevelopment Authority on Friday (April 28) showed that overall private residential prices were down by 0.4 per cent in the first quarter - led mainly be the landed homes segment.
This was an improvement over the flash estimate of a 0.5 per cent decline released earlier this month, as well as the 0.5 per cent drop recorded from the third to fourth quarter last year.
Non-landed private residential prices, in particular, was flat in the first quarter, following a 0.8 per cent decline in the previous quarter.
The numbers suggest that the private home market could be near a trough - in line with analysts' observation in the past months.
Condo prices in some regions recovered in the first quarter: rising by 0.3 per cent in the city fringe and by 0.1 per cent in the suburbs.
However, the price recovery may not be broad-based and is probably driven by new condo launches in the February and March.
Two new projects in the suburban areas - CEL Development's Grandeur Park Residences in Tanah Merah and The Clement Canopy in Clementi by UOL Group and Singapore Land - were put on the market in the first quarter.
The 505-unit The Clement Canopy sold 207 units at a median price of S$1,343 psf in February, and a further 59 units in March at a median price of S$1,366 psf.
Grandeur Park Residences, which was launched in March, shifted 484 out of 720 units at a median price of S$1,406 psf.
Meanwhile, prices in the city fringe were likely propped up by Lendlease's new project Park Place Residences At PLQ in Paya Lebar. It moved 217 out of 429 units at a median price of S$1,805 psf in March.
Analysts told The Straits Times that prices in the resale market, however, have been fairly subdued and could still weigh on overall private home values, meaning that a sharp turnaround is unlikely to happen.
"I feel that it will likely be a wide U-shape recovery," said Mr Wong Xian Yang, head of research and consultancy at OrangeTee.
The improvement in market sentiment, partly due to the Government's easing of the seller's stamp duty measure in March, boosted sales transactions in the first quarter.
Developers sold 2,962 new units in the first three months of the year, up by about 28 per cent from the last three months of 2016.
There were 2,170 resale transactions in the first quarter, up from 1,944 in the fourth quarter.
Although sales have improved and price decline eased, it is important to note that other factors could continue to put a drag on the property market.
These include the persistently weak leasing market, uncertain employment outlook and potential interest rate hikes during the year.
The first quarter private housing statistics may bring some cheer, but it is too early to celebrate.