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Private-home resale volume highest in nearly two years

SINGAPORE — The resale volume of non-landed private homes climbed last month to the highest in nearly two years, as prices stayed unchanged from April in what analysts called a stabilisation of the housing market.

Private homes in Singapore. TODAY File Photo

Private homes in Singapore. TODAY File Photo

SINGAPORE — The resale volume of non-landed private homes climbed last month to the highest in nearly two years, as prices stayed unchanged from April in what analysts called a stabilisation of the housing market.

In its monthly flash report released yesterday, SRX Property estimated that 543 non-landed private residential units were resold in May, 4.2 per cent more than the previous month and 33.1 per cent higher than the same month last year.

It was also the highest number of transactions since June 2013, when 582 resale units changed hands.

The report also showed that while resale prices were flat from the previous month, they were 2.8 per cent lower than May last year.

Property analysts said the latest set of statistics by SRX showed that more buyers hopped off the fence they had been sitting on, while more owners put units up for sale amid weak leasing prospects.

“When volume increases as prices stabilise, it means potential buyers are beginning to see value in the current market. We saw a dip in volume when the Total Debt Servicing Ratio framework was introduced. But after almost two years, the buyers who have been waiting probably realised prices are not going to fall very much, so they are coming back,” said Mr Alan Cheong, senior director of research and consultancy at property firm Savills Singapore.

“At the same time, there are also homeowners who have been holding back from selling, but have decided to give in to offers that they have received at current price levels,” he added.

Homes in the Core Central Region (CCR), or city centre, registered a price decline of 1.2 per cent last month from April.

This was cushioned by price increases of 0.8 per cent and 0.3 per cent in the Rest of Central Region (RCR), or city fringes, and Outside Central Region (OCR), or suburbs, respectively, SRX Property data showed.

Mr Eugene Lim, key executive officer at property agency ERA, said the decrease in CCR resale prices could be due to difficulty in securing tenants. “With a tight foreign-labour policy, changes in the property tax scheme and monthly mortgage payments, homeowners who are unable to rent out their vacant houses would find that selling their properties quickly would be a better alternative to leaving them empty.

“Therefore, this has put some downward pressure on resale prices as these owners would be more willing to let go of their properties at slightly lower prices,” he said.

As more buyers and sellers enter the market at prevailing price levels, analysts said the overall resale volume looks set to increase.

“A reason for buyers turning to the secondary market could be the relatively lower prices. This, coupled with the conservative number of launches by developers, could have led to a more active secondary market … For the whole of this year, an increase in overall resale volume should be expected if the current momentum holds,” said Mr Lim,who expects about 6,000 resale units to change hands for the whole of this year, 20 per cent more than last year.

However, prices will probably remain subdued even though demand is expected to grow, Mr Cheong said.

“When new homes are completed, we may see people letting go of their units in the resale market. Unless demand also increases at the same or faster rate, it is unlikely that prices will go up.”

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