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Private home resale prices fall to 21-month low: SRX

Resale prices of non-landed private homes fell 1.3 per cent from the previous month, while resale volume was flat, according to flash estimates from the Singapore Real Estate Exchange.

SINGAPORE: The resale prices for non-landed private homes continued its downward trend in July, falling 1.3 per cent month-on-month, according to flash estimates from the Singapore Real Estate Exchange (SRX) on Monday (Aug 11).

SRX said the decline represented a 21-month low since October 2012 and the fall in prices was felt in all three regions. Prices for the Core Central Region fell the most with 4 per cent, while Rest of Central Region and Outside Central Region dropped 1.1 per cent and 0.6 per cent respectively.

The median Transaction Over X-value (TOX) for the majority of districts - 18 out of 24 - was negative in July. For districts with more than 10 resale transactions, districts 9 (Orchard, Cairnhill, River Valley), 15 (Katong, Joo Chiat, Amber Road) and 23 (Bukit Panjang, Choa Chu Kang) saw the most negative median TOX at -S$130,000, -S$40,000 and -S$30,000 respectively.

SRX said this means that majority of the non-landed private property buyers last month in these districts purchased their units below what other buyers who came before them paid for in similar units.

Conversely, districts 5 (Pasir Panjang, Clementi) and 16 (Bedok, Upper East Coast) posted positive TOX values of S$40,000 and S$10,000 respectively.

In terms of resale volume, there were an estimated 431 transactions in July, compared with 427 in June. The volume dropped 20.5 per cent from the same month last year, SRX said.


As for rental transactions, the number of full units rented out in July was 3,360 - representing a 5.3 per cent on-month hike. Year-on-year, rental volume improved by 9 per cent from the 3,082 contracts signed in July 2013, according to the data.

However, rental prices went down, slipping 0.8 per cent from the previous month. It is a 38-month low since May 2011, SRX added. 

The decline was greatest in the Rest of Central Region at 1.4 per cent, while Core Central Region dipped 1.1 per cent. Prices for Outside Central Region improved slightly by 0.3 per cent.


Property observers said prices are likely to continue falling, under pressure from cooling measures introduced in recent years. Authorities have said that the property curbs are here to stay for now - with National Development Minister Mr Khaw Boon Wan the latest to make that point in Parliament last week.

According to property observers Channel NewsAsia spoke to, the fall in prices is not alarming and will only be a cause for concern if it is sustained for a few months.

There is in fact room for more moderation islandwide, according Mr Alan Tan, head of Singapore projects at HSR International Realtors. He pointed to how overall prices have gone up around 60 per cent from 2010 to 2013, but have only dropped by 20 per cent since 2013, when the latest round of cooling measures were implemented.

The resale volume, which remained flat in the traditionally upbeat month of July, also did not come as a surprise to property observers.

"Majority of buyers are still adopting the wait-and-see method. We do have a lot of shoppers in the market but majority of them are not willing to put in that deposit. Most of the buyers are quite confident that the prices are still going to go down," said Mr Benedict Lim, senior vice president of Dennis Wee Realty.

"If you compare to 2010, yes there is a big drop because the market was picking up; the market was heating up at that time,” said Mr Tan. “We used to see trends where new homes are sold off in months, two months, in a week even. That trend is not supposed to be normal. What we are seeing today is normal.

“Where the sales are consistent, they are not exactly fast, but they are consistent. If every new property launched is going to get sold out in a month, I think developers are just going to be increasing prices every month. So what we are seeing is a good control of price compared to the sales speed. If prices are dropping and the buyers are not coming back, then something is wrong."

Observers said homeowners would have to be realistic in their asking prices to seal deals. They can also turn to the rental market for respite. But official figures showed that rental prices have also been trending downwards since the third quarter of 2013, shortly after the Total Debt Servicing Ratio was introduced at the end of June 2013. 

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