Private-home resale prices flat as market stalemate continues

SINGAPORE — The private residential market stayed in the doldrums last month, with resale non-landed home prices remaining flat as transaction volumes fell, largely due to the continuing stand-off between buyers and sellers as well as the seasonally quiet Chinese New Year holiday period.

February was the second consecutive month of unchanged private-home resale prices after the 0.2 per cent month-on-month decline in January was revised upwards to flat, a flash report by SRX Property showed yesterday.

On a year-on-year basis, last month’s prices were 3.2 per cent lower than in February last year.

The report showed that price movements were mixed across the island, with those in the Rest of Central Region (RCR), or the city fringes, declining 0.8 per cent, while the other two areas — Core Central Region (CCR), or the city centre, and Outside Central Region (OCR), or the suburbs — saw prices climbing 1.5 per cent and 2 per cent, respectively.

This was a reversal of the price movements in January, which saw RCR homes enjoying gains while those in the CCR and OCR registered declines.

Despite overall prices remaining unchanged in the past two months after two months of declines, analysts told TODAY there was little evidence to show that the market had bottomed out.

“I think this is more a case of a stalemate than the market bottoming. We probably won’t reach the bottom unless expectations for prices to fall further are done and dusted. But with such expectations still lingering, there will still be downward pressure on the market,” said Mr Alan Cheong, senior director of research and consultancy at property agency Savills.

Mr Chris Koh, director of property firm Chris International, said the latest data may not paint a complete picture of the market as transactions occurred during the seasonally slower period, evident by the fall in transaction volume.

SRX estimated 321 previously-owned non-landed private homes changed hands last month, 6.7 per cent lower than the 344 units resold in January. On a year-on-year basis, however, this was 36.6 per cent higher than the 235 transactions in February last year.

“Activity is usually slower in January and February because of the school opening and Chinese New Year celebrations, so the figures may not show the entire picture. The price increases in CCR and OCR are also not likely to indicate a recovery. They could just be due to the type of transactions — maybe there were more higher-value homes sold that month,” Mr Koh said.

“What the figures show is that prices are holding and sellers are not hard-pressed to sell because we are not in an economic recession … We need to look at the figures from March onwards to get a better reading of the market,” he added.

TODAY earlier reported that many private-home owners have set asking prices above the properties’ valuations, refusing to budge despite the weakening housing market, while potential buyers are hunting for bargains.

Buying sentiment will continue to be affected by the property cooling measures as well as loan curbs in the coming months, but buyers could gradually return to the market as homes become more affordable, analysts said.

Mr Cheong said: “The stalemate will continue and it is anybody’s guess when that will end.

“But the market has been going down since the implementation of the Total Debt Servicing Ratio in June 2013 — that’s two years of price declines. For people on the sidelines, that’s two salary increments and two bonus payouts. Many of them can afford to buy and maybe this year, we will see them give up waiting and enter the market.”