Resale prices of private homes down 0.6% in August: SRPI
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September 28, 2015
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Prices of completed private apartments appear to be stabilising
after months of decline, despite some ambiguous data out yesterday.
The new numbers point to a
0.6% dip in values from July to last month following stagnant pricing in June
and July, according to flash estimates for the NUS Singapore Residential Price
Index.
Such marginal price changes
are expected and should be the case for a while, said PropNex key executive
officer Lim Yong Hock.
"Many home owners are
not pressured into selling as interest rates are still relatively low. There
won't be many distressed sales for the time being, barring other market forces
- such as expectations of an interest rate hike, or a recession, which could force
some owners to sell their properties at lower prices."
Last month's dip in prices
was probably due to lower volumes, given the Hungry Ghost Festival, said R'ST
Research director Ong Kah Seng.
"It was also just
before the general election and potential buyers may have put their decisions
on hold in case there were any changes to cooling measures, or incentives to
encourage home buying."
Resale transactions of
central units, excluding small units, were down 23% to 114 last month, while
non-central unit sales fell 23.6% to 272, he noted.
The slight price decline
last month was led by completed units in the central region - Districts 1 to 4 and
9 to 11, which posted a 0.7% month-on-month drop.
But prices for this segment
rose in June and July and are up about 0.2% from May.
Sale volumes also seem to
be rising, said OrangeTee research manager Wong Xian Yang.
There were 986 resale
apartments in the central region shifted in the first eight months of the year,
up 41.3 per cent over the same period last year. "While it is a bit too
early to say if prices for central units are bottoming out, there is a higher
chance prices will move sideways," said Mr Wong.
He believes prices of
non-central units are more likely to decline. They fell 0.5% last month, after
dropping 0.7% in July.
The increasing supply of
units in this area is putting pressure on rents, and vacancy rates are on the
rise, said Mr Ong.
Yesterday's flash estimates
also indicate that the market has some ground to make up.
The overall index is down 4%,
compared with August last year, and is 10.5% below July 2013, when prices were
at their highest in recent years.
Small units - up to 506sqft
- are one of the brighter spots. Prices were flat last month after rising 0.5% from
June to July.
The index indicates that
this segment seems in better health than the three other price categories, said
SLP International executive director Nicholas Mak.
It contracted 2.7% year on
year - the smallest rate of decline among the four - and fell in only four out
of the past 12 months, the lowest number of months of decline.
"However, the strength
of the small-apartment market segment will be tested in the next two years as
an increasing number of shoebox units are completed," Mr Mak said, noting
that most of these homes are bought for investment.
If the inflow of foreign
labour continues to be tight, the leasing market will stay soft.
"In a tenants' market
where the tenants are spoilt for choice, shoebox units may not be as attractive
to some tenants as housing units with two or more bedrooms," Mr Mak said.
Lower rental returns will
likely hit unit prices as well.
Source: ST
