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May resale home volume jumps while prices edge higher

SINGAPORE — The Republic’s private housing market showed further signs of stabilisation in May, as resale volume jumped 35.7 per cent to the highest in more than three years and prices continued to inch upwards.

Singapore's private housing market showed further signs of stabilisation in May, as resale volume jumped 35.7 per cent to the highest in more than three years. Photo: REUTERS

Singapore's private housing market showed further signs of stabilisation in May, as resale volume jumped 35.7 per cent to the highest in more than three years. Photo: REUTERS

SINGAPORE — The Republic’s private housing market showed further signs of stabilisation in May, as resale volume jumped 35.7 per cent to the highest in more than three years and prices continued to inch upwards.

An estimated 840 non-landed private residential units were resold in May, the third consecutive month of increases and the highest volume since January 2013, when 1,045 units were resold, a flash report by SRX Property showed yesterday.

SRX said sales of 81 completed homes at OUE’s high-end condominium project Twin Peaks contributed to the increase in May’s volume, after the developer dangled marketing schemes including one that allows buyers to defer their payment balances by two to three years. Completed developments under the deferred payment plan are classified under the resale category by SRX.

“As SRX noted, part of the reason for the large increase was sales at completed projects ... Nonetheless, resale units continue to find favour with owner-occupiers as investors tend to play a lower key due to the challenges faced in the rental market,” said Mr Eugene Lim, key executive officer of ERA Realty Network.

Resale prices also rose for the third straight month, inching up 0.4 per cent month-on-month in May, with broad-based increases recorded across the island. Homes in the Outside Central Region (OCR), or suburbs, took the lead with a 0.5 per cent rise, followed by those in the Core Central Region (CCR) or city centre, and Rest of Central Region (RCR) or city fringes, with 0.4 per cent and 0.3 per cent growth, respectively.

However, Mr Lim cautioned against being too optimistic over the latest set of data by SRX: “It is still too early to conclude that the market has turned, due to it being monthly reporting. Nonetheless, the private resale market is quite stable ... We expect this trend to continue in the absence of any external shocks or market stimulus.”

Mr Alan Cheong, research head at property firm Savills Singapore, said the figures pointed to a still-resilient market three years after the implementation of the Total Debt Servicing Ratio (TDSR) framework in June 2013. The TDSR, along with cooling measures such as the Additional Buyer’s Stamp Duty, had dented buying sentiment and sent prices on a sustained but gradual downtrend.

“During these three years since TDSR, we have had three salary increases and three bonus payouts — which increased people’s affordability when prices didn’t move too much, so the market was coming to an equilibrium. We have seen CCR improving since December and now OCR and RCR following, so the market seems quite stoic,” he said.

Sales of completed developments could continue to boost resale volume in the coming months as developers clear inventories, the analysts said.

Mr Cheong said: “I think while prices will be bumping around this level, resale volume could see some upside due to the low base and developers potentially clearing completed inventories under ways that classify these under resale. Having said that, unlike buying a car which many Singaporeans see as a necessity, property is a big ticket and investment good. This means with the slowing economy, people would be more cautious about taking on debt.”

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