Resale condo prices decline further

Resale prices of non-landed private homes slipped for a second straight month in August, after edging up from March to June - in a sign that the resale property market is still finding its footing.

Flash estimates from SRX Property yesterday showed that prices fell 0.8 per cent last month from July. This followed a revised 0.7 per cent decline in July over June.

"The second consecutive monthly drop in prices raises doubts about the expected stabilisation of prices. Price gains made from March to June this year have been nearly erased over the last two months," said Mr Wong Xian Yang, head of research and consultancy at OrangeTee.

Analysts cited various reasons for the price dip last month, including the uncertain global economic conditions, weak sentiment and the traditional Chinese Hungry Ghost Festival, which typically sees weaker activity in the property market.

The overall resale price index for non-landed private homes was down also by 0.8 per cent from August last year.

Resale private condominiums on the city fringe led the price decline, falling by 1.5 per cent last month against July, while prices in suburban areas fell 0.7 per cent. Homes in the core central region, meanwhile, eked out a 0.1 per cent gain.

SRX Property's data also showed that an estimated 817 resale units were sold last month, up 5.3 per cent from 776 in July. Sales in July were up by 10 per cent from the 705 units resold in June.

PropNex Realty chief executive Ismail Gafoor said: "The two consecutive quarters of month-on- month sales increases point to greater confidence building among buyers that value is emerging in the secondary market."

On a year-on-year basis, the sales volume was up a hefty 59.3 per cent last month.

SRX's median transaction over X-value (TOX) - which measures whether buyers are overpaying or underpaying its computer-generated market value - came in at negative $11,000 last month. This was $1,000 more than the negative $10,000 in July.

For districts with more than 10 resale transactions last month, District 20 (Bishan, Ang Mo Kio) posted the highest median TOX of positive $18,000. This means that a majority of the buyers in this district purchased units above the computer-generated market value.

District 15 (Katong, Joo Chiat, Amber Road) posted the largest negative TOX of -$48,000, SRX data showed.

Analysts said that in view of the lacklustre propery market, buyers still hold sway in price negotiations and sellers are also becoming more flexible about offering discounts.

"Additionally, some forward-looking sellers are worried of a potential hike in the United States Fed rate which could lower the price further," said Dr Lee Nai Jia, head of research for South-east Asia at Edmund Tie & Company.

Market watchers expect resale condo prices to continue to ease marginally for the rest of the year.

A version of this article appeared in the print edition of The Straits Times on September 14, 2016, with the headline 'Resale condo prices decline further'. Print Edition | Subscribe