Resale condo market stays weak as prices, volumes drop

SINGAPORE — The non-landed private residential resale market continued to weaken last month as loan curbs and cooling measures weighed on sentiment, with analysts saying the status quo will remain unless the government tweaks its policies.

Non-landed private residential resale prices dipped 0.7 per cent last month from March, showed advance estimates from the Singapore Real Estate Exchange (SRX) Property yesterday, deepening from the revised 0.4 per cent drop in the previous month. Compared with a year earlier, resale prices fell by 4 per cent.

Transaction volumes remained low amid a continued stand-off between sellers and buyers.

A total of 440 non-landed private residential units were resold last month, a 2.7 per cent drop from the 452 units in March, SRX data showed.

“It is expected that prices have continued to decline moderately as none of the cooling measures and loan curbs have been changed,” said Mr Eugene Lim, key executive officer of real estate agency ERA.

“Buyers continue to adopt a conservative stance when it comes to making an offer on the property as most are affected by loan curbs or Additional Buyer’s Stamp Duty (ABSD). Furthermore, there is the threat of housing loan interest rates increasing as the year pans out,” Mr Lim said.

The largest drop last month was registered in the Outside Central Region (OCR), or suburbs, where prices fell 1.5 per cent.

“This can be attributed to the greater number of new launches and supply of resale properties compared to other regions,” said Mr Ismail Gafoor, CEO of PropNex Realty.

Prices in the Core Central Region (CCR), or city centre, dipped 0.1 per cent while those in the Rest of Central Region (RCR), or city fringes, were up by 0.4 per cent.

“The prices suggest there may be a price consolidation in these two regions,” said Mr Ismail. “With the possible price consolidation ongoing, we do not think that the price slides will continue much longer, as buyers and/or investors are expected to step in to pick up units at good prices.”

Most analysts, however, said prices would probably fall further.

“We can expect prices to continue with their moderate rate of decline as more sellers who are keen to dispose of their properties give a discount for a quicker sale,” noted Mr Lim. “However, the market is not under tremendous pressure and so we may see prices for the whole year decline no more than 5 to 8 per cent.”

“One possible way sellers can strive to sell their units is to lower their asking prices. If Government measures remained unchanged, the pricing situation will remain the same for this year, and also for the next year,” said Mr Wong Xian Yang, a research and consultancy manager at real estate firm OrangeTee.

Mr Ismail does not rule out the Government tweaking its cooling measures in the months ahead.

“With the impending elections, any tweaking of the current policies will likely swing sentiment towards more of a seller’s market,” Mr Ismail said. “This may be an opportunity for genuine buyers to seek out good investment opportunities.

“It is a matter of time, and we see the change probably on the radar by early next year. The ABSD would probably be one of the choices for policy revision. Generally, we do not expect any changes to be made for the Total Debt Servicing Ratio,” added Mr Ismail.