Skip to main content

Advertisement

Advertisement

Private home resale volume slumps to 2-year low: SRX

SINGAPORE — The resale market for non-landed private homes continued to soften last month, with transactions tumbling to their lowest in two years as the Government’s cooling measures curbed demand.

SINGAPORE — The resale market for non-landed private homes continued to soften last month, with transactions tumbling to their lowest in two years as the Government’s cooling measures curbed demand.

An estimated 310 previously-owned private homes changed hands last month, a 9.1 per cent decline from the previous month and a 70 per cent fall from the same month last year, a flash report by the Singapore Real Estate Exchange (SRX) showed yesterday.

The report reinforces recent data pointing to a slowdown in the overall housing market. Last week, the SRX’s flash data on public housing showed that the median cash-over-valuation premium for Housing and Development Board resale flats fell to S$3,000 last month, the lowest since the global financial crisis five years ago. And Urban Redevelopment Authority data showed that new private home sales slumped 33 per cent to a four-year low last year, while price growth slowed to 1.1 per cent from 2.8 per cent in the previous year.

“The market is still reacting to the various curbs: The cooling measures, the Total Debt Servicing Ratio framework and the latest changes to the Executive Condominium scheme. That’s the sentiment in the entire real estate market. Buyers who don’t need to buy now will prefer to stay on the sidelines to watch the market, so it’s going to be stagnant for a while,” said Mr Jeffrey Hong, Chief Executive of property firm GPS Alliance.

Despite the fall in volume, overall resale prices of private homes inched up 2.3 per cent last month in what analysts said was probably a blip in the face of the weak sentiment across all segments in the market.

“It seems a little counter-intuitive, although I do hear that some agents have been closing relatively high-value deals. That’s one possible explanation for the lower volume but higher prices. Sellers are also in no hurry to sell and can hold out for better prices,” said Savills Senior Director of Research and Consultancy Alan Cheong.

“But we can’t say for sure that the market is showing signs of a rebound. We’ll need to wait for the next few months’ figures so that we can match that with what we see on the ground to assess whether the market has turned around,” he added.

The private home rental market enjoyed a rebound in both volume and prices, according to the SRX data. An estimated 2,348 units were rented last month, up from the previous month’s 2,172 units, while rents increased by 1.1 per cent. However, the rebound is not likely to be sustained, with a surge in supply of completed units later this year expected to pressure rents, analysts said.

“A lot of the units will be completed in the third and fourth quarter of this year, so there will be competition for tenants. On the demand side, the hiring of expatriates has been tightened and their accommodation budget has also been frozen or reduced,” said Mr Hong.

Mr Eugene Lim, Key Executive of ERA, said these new completed units would also keep resale prices in check. And with buyers increasingly drawn to new launches where developers continue to dangle discounts, the resale market will probably stay muted.

“Overall, we can expect private property prices to further moderate by 6 to 10 per cent in 2014,” he said.

Read more of the latest in

Advertisement

Popular

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.

Aa