Singapore private home resale prices edge up 0.6% in January: SRX

High-rise condominium buildings in the Singapore city centre.
High-rise condominium buildings in the Singapore city centre. PHOTO: ST FILE

SINGAPORE - Resale prices of non-landed private homes rose a small 0.6 per cent in January from December, flash estimates from SRX Property showed on Thursday (Feb 11), though analysts said they expect the general downtrend of prices to continue.

"Although prices posted a slight increase in the month of January, the overall trend for the year should still be downwards," said Mr Eugene Lim, key executive officer of property agency ERA.

"This is because overarching issues continue to press on the property market," he added. "The economy is facing headwinds and the rental market continues to face downward pressure due to supply and demand mismatch as the economy is restructuring to be less reliant on foreign manpower."

"In addition, in view of rising interest rates and weak rental market, owners of multiple properties bought before the imposition of the TDSR (total debt servicing ratio) might find themselves forced to dispose of some properties if they are unable to continue servicing their mortgages."

Compared to a year ago, prices last month were 1.7 per cent lower than January 2015. They were also down by 7.2 per cent from their recent peak in January 2014.

In terms of location, prices rose most in the prime districts (1 per cent) and by 0.1 per cent and 0.8 per cent respectively in the city fringes and suburbs.

SRX also said prices fell 0.5 per cent in December, less than the 0.8 per cent fall in its flash estimate for the month. This means prices slipped 1.8 per cent for all of 2015 compared to a 4 per cent fall in 2014.

An estimated 364 apartments and condominium units were resold in January, down 20 per cent compared to 455 units in December, said SRX.

But this was not surprising given that buying activity tends to be sluggish in the month before Lunar New Year.

When compared to the same month last year, resale volume was slightly higher - up 3.7 per cent from the 351 units resold in January 2015.

Last month's resales, however, was 82.2 per cent lower than the peak of 2,050 units hit in April 2010.

EAR's Mr Lim said he expected buying momentum to pick up in the private resale market.

"Following the tapering of housing units released under the Government Land Sales programme, fewer new private residential units are expected to be launched this year," he said. "Coupled with stabilizing prices, we can expect that more buyers will turn to the resale market to purchase a private home."

SRX figures also showed that its has become an increasingly buyers' market with more sellers willing to lower their asking prices.

SRX's overall median Transaction Over X-Value (TOX) - which measures how far or below a computer-generated market value units are actually going for - doubled to a negative S$10,000 from negative S$5,000 in December.

This means that buyers, on average, are paying S$10,000 less than market value for their resale units.

Broken down further, among relatively active districts, District 12 (Balestier, Toa Payoh, Serangoon) posted the most negative median TOX of S$36,000.

In contrast. District 25 (Kranji, Woodgrove) posted the highest median TOX of S$24,000.