Private home prices up 0.6 per cent in April

SINGAPORE — Resale prices of non-landed private property continued to head north in April, moving up 0.6 per cent from the previous month in a new record, flash estimates from SRX Property showed on Tuesday (May 8).

The first four months of the year saw resale prices increasing by 5.4 per cent, with price levels last month 9.4 per cent higher than a year ago.

Property in the city fringes (Rest of Central Region) led the way, as prices went up by 12.6 per cent last month. These areas include Queenstown, Katong, Marine Parade, Ang Mo Kio, Braddell Road and Thomson.

Year-on-year private home prices for April gained 9.5 per cent, while the core central region or city centre went up by 9.2 per cent. Homes in the suburbs, or outside central region, saw price gains of 7.3 per cent from a year ago.

Resale volume fell by 1.7 per cent, as an estimated 1,360 units were resold last month, compared with 1,383 units in March. Volume for April was up by 26.9 per cent from the previous year, which saw 1,072 units sold in the same month.

According to the SRX flash estimates, the overall median Transaction-Over-X-Value (TOX) — an indicative measure of how much a buyer is underpaying or overpaying for a unit — was at a positive S$20,000, which was unchanged from the previous month.

While prices rose at a slower pace compared to March’s revised 1.4 per cent increase, experts dismissed it as volatility when viewed on a month-on-month basis.

Ms Christine Sun, head of research and consultancy at OrangeTee, expected prices to continue to rise, at least until the end of this year or middle of next year.

“The current market sentiment is still very strong and economic fundamentals like robust gross domestic product growth, high employment rates, and political stability are in place to support the market,” she said.

ZACD Group executive director Nicholas Mak predicted that private residential resale prices will continue to rise in the next 12 months, as a result of “positive market sentiments, spillover impact from the active enbloc sale market and the growing confidence that the property market is firmly on the recovery path.”

He projected that the SRX resale price index will rise by 10 to 15 per cent from a year ago.

Mr Mak also noted that the price increase was not always fixed in a particular region, and would fluctuate due to various reasons.

He said the higher price increase for city fringe homes last month was probably due to a high number of enbloc sales in that area, which led to sellers having to find replacement homes and causing a higher price increase.

Mr Mak was not surprised by the increase, as he said: “This also an area where some developments are small units, especially newer developments that enter the market. It is also where you have a mixture of homeowners and investors which is a possible reason why prices increased.”

While sales volume dipped month-on-month, it has risen by double-digits on a yearly basis, which “indicates that the market has not slowed down but on the contrary, performed better than last year,” said Ms Sun.

As more displaced enbloc owners enter the market in the months ahead, the volume of sales is expected to continue to rise, she added.

However, Mr Mak suggested that the resale volume may not increase at the same rate as the price index. This is because the current active enbloc sale market has reduced the stock of older completed units available for sale, as many non-landed developments have either been sold collectively or are in the process of an enbloc sale.

Hence, owners would stop offering their units for individual sale in the resale market, he said. “As a result, the supply of completed units for sale in the market will drop, leading to limited growth in the resale volume.”

Mr Mak also predicted that resale transaction volume for 2018 would be between 11,000 and 14,000 units.