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Homebuyers return to the market in numbers as prices continue to ease

SINGAPORE — Housing prices continued to fall in the second quarter, drawing buyers back into the residential property market in droves to drive transaction volumes to their highest levels in more than four years.

SINGAPORE — Housing prices continued to fall in the second quarter, drawing buyers back into the residential property market in droves to drive transaction volumes to their highest levels in more than four years.

Resale prices of Housing and Development Board (HDB) flats eased 0.1 per cent in the second quarter from the first to mark the third straight quarter of decline, data from the public housing authority showed on Friday (July 28). Volume surged 32.5 per cent to 6,001 transactions from 4,530 over the same period.

PropNex Realty Chief Executive Ismail Gafoor noted the slowing of the second-quarter price decline from the first quarter’s 0.5 per cent drop. “The current price points are indeed enticing for buyers to enter the market, especially so for young buyers and upgraders. The HDB resale segment also witnessed 6,001 transactions this quarter, the highest in the last 18 quarters,” he said.

Mr Ismail said HDB resale prices will likely be flat this year, with prices rising or falling by just 1 per cent, while the transaction volume is expected to exceed 22,000 units due to the lower asking prices.

In the private housing segment, home prices fell 0.1 per cent in the second quarter from the first, extending the longest losing streak on record to 15 straight quarters, data from the Urban Redevelopment Authority (URA) showed on Friday. However, the decline slowed significantly from the 0.4 per cent drop in the first quarter.

Both the developer and resale segments of the market registered higher levels of activity, although the secondary market saw more buzz. Developers sold 3,077 private residential units, excluding executive condominiums, in the second quarter, up 3.9 per cent from the 2,962 units sold in the previous quarter.

There were 3,698 resale transactions in the second quarter, up 70.4 per cent from the 2,170 units transacted in the previous quarter. Resale transactions accounted for 53.6 per cent of all sale transactions in the second quarter, compared with 41.7 per cent in the previous quarter. There were also 130 sub-sale transactions in the second quarter, compared with the 70 units transacted in the previous quarter.

Mr Ismail said the total of 6,905 private home transactions in the second quarter is the highest in the past 16 quarters, and also brings the total volume in the first half of the year to 12,107 units.

“The real estate market is currently abuzz with activities as we feel positive sentiment all round, from the keen interest displayed by consumers at the recent launches ... bullish bidding of land sites by developers and also the increasing number of successful collective deals recently,” he said.

Ms Christine Li, Director of Research at property firm Cushman and Wakefield, said: “The actual private residential price performance surprised on the upside. The overall price index has improved slightly from the flash estimates after taking into account the transactions in the last two weeks of June. The improvement was also across the board from high-end (Core Central Region) to mid-tier (Rest of Central Region) and mass market (Outside Central Region).”

“We are of the view that the price recovery story has already nudged fence-sitters to take action, those who could have waited on the sidelines for years. The fact that the transaction volumes are sustained is also a good sign ... Coupled with the increasing number of successful collective sales, it is just a matter of time before prices start to head north,” she added.

The number of unsold private residential units has been decreasing since the third quarter of 2016, Ms Li noted. The stock dropped to 8,459 unsold units at the end of the second quarter from 10,335 units in the first, an 18 per cent decline that is the fastest pace since the second quarter of 2012.

“We believe Singapore’s housing prices will continue to be well-supported by fundamentals. The potential impact of rising interest rates on the housing market looks muted and coupled with the absence of a major downturn in the economy, we believe that Singapore home prices remain affordable in the short term,” she said.

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