Buyers emerge as home prices continue slide

SINGAPORE ­— The number of non-landed private homes resold last month rose 15.9 per cent from August a year ago, as more buyers resurfaced amid the slow decline in prices, with analysts saying that the market remained under pressure from property cooling measures and the volatile external environment.

In its monthly flash report released today (Sept 8), SRX Property estimated that 466 non-landed private residential units were resold last month, up from the 402 units in the same month a year ago, making it the 10th consecutive month of year-on-year increase in homes resold.

“The double-digit year-on-year growth is a strong signal that more buyers are entering the market as resale prices are more stable now, and sellers looking to sell are also more willing to negotiate,” said Mr Eugene Lim, key executive officer of property agency ERA.

Prices for resale homes were down 1.6 per cent last month, compared with a year ago, and 6.5 per cent lower than the peak in January last year, the SRX data showed.

“The contraction is mainly due to the ongoing property cooling measures and weak market sentiment,” said Mr Nicholas Mak, executive director of research and consultancy at property firm SLP International.

Repeated rounds of cooling measures, such as the Additional Buyer’s Stamp Duty, and loan curbs such as the Total Debt Servicing Ratio framework, have curbed demand. Monetary Authority of Singapore managing director Ravi Menon said in July that it would be premature to relax the cooling measures as the housing price correction from their peak had been modest following the sharp rise in recent years.

On a month-on-month basis, resale prices of non-landed private homes rose slightly last month from July, while sales volume fell due to the seasonal effect of the Hungry Ghost Festival.

“While prices increased in the month of August, it was only a very slight increase of 0.2 per cent,” said Mr Lim. “Moreover, the increase was driven by only one geographical sector, the Rest of Central Region (RCR), while the other sectors recorded price decreases. A surer sign of market recovery would be an increase in prices across the board. However, this is unlikely to happen.”

Prices in the RCR, or city fringes, jumped 1.8 per cent from the previous month; those in the Core Central Region, or city centre, fell by 0.5 per cent; while those in the Outside Central Region, or suburbs, slipped 0.2 per cent, data from SRX showed.

The volume of resale units sold fell by 16.8 per cent last month compared with July in an expected decrease, as August coincided with the onset of the Hungry Ghost Festival and some people preferred not to buy properties during what they deemed to be an inauspicious period, said Mr Lim.

Looking ahead, the risk of a regional economic slowdown and higher interest rates could adversely affect real estate investment demand, said Mr Mak. The private residential price index is expected to continue to decrease in the coming months unless the government relaxes the cooling measures significantly, he added. He expects non-landed private home prices to fall by 2.5 per cent to 4 per cent for the full year.

Mr Lim said: “As loan curbs and cooling measures will continue to be in place, minor price movements month to month are to be expected. As such, we project an overall decline of no more than 5 per cent for the year.”