Private-home resale prices rebound slightly, but downward trend remains

SINGAPORE — Resale prices of non-landed private homes inched up last month on the back of price improvements in the city fringes and suburban areas, but analysts said the slight rebound did not signal a recovery as weak market fundamentals persist as a result of various property curbs imposed in recent years.

Non-landed private residential resale prices rose 0.4 per cent last month from September, after a 0.6 per cent drop the previous month, a flash report by Singapore Real Estate Exchange (SRX) showed yesterday. However, prices are still 4.5 per cent lower than in the same period last year and 5.2 per cent off the recent peak in January this year.

The gains last month were led by a 0.6 per cent increase in resale prices in both the Rest of Central Region (RCR), or city fringes, and the Outside Central Region (OCR), or suburbs, the SRX data showed. Resale prices in the Core Central Region (CCR), or city centre, suffered a 0.3 per cent drop last month, extending the 1.5 per cent fall in the previous month.

Mr Nicholas Mak, executive director of SLP International Property Consultants, said: “This is not the start of a price recovery … there is no change in the market fundamentals that resulted in the current market weakness. The cooling measures and the Total Debt Servicing Ratio framework are still in place and the Government has mentioned that it will not remove these curbs any time soon.

“Furthermore, by all indications, the other price indices prepared by other organisations … show that overall private residential property prices are still declining as well.”

Amid the small price gains, resale transaction volume in the non-landed private residential segment continued to be low, with an estimated 451 units changing hands last month. This is 2.2 per cent lower than in September and 4.7 per cent lower than in October last year, the SRX data showed. Of these units, 232, or more than half the total volume, were located in the OCR.

OrangeTee manager of research and consultancy, Mr Wong Xian Yang, said comparing the quarterly price performance would give a better sense of the market direction. He expects prices to continue trending downwards, though the pace of decline may slow.

“Though monthly data do give us hints on the future price direction of the market, for a better sense, it is better to use quarterly data where there is more transaction data available … Barring any changes in current housing policies, a rebound in prices is not expected to happen in the short term. We expect prices to continue to edge lower,” he said.

Data published last month by the Urban Redevelopment Authority showed that in the third quarter this year, prices of private homes fell 0.7 per cent, narrowing from the 1 per cent decline in the March-to-June quarter.