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Resale prices of non-landed private homes hit 16-month low

Resale prices of non-landed private homes hit a 16-month low in April, even as resale volume reached its highest since October 2013, a report by the Singapore Real Estate Exchange showed.

SINGAPORE: Resale prices of non-landed private homes hit a 16-month low in April, while the resale volume last month reached its highest since October last year, according to the latest flash estimates from the Singapore Real Estate Exchange (SRX).

Advance data from SRX showed that overall resale prices of non-landed private residential properties slipped by 1.7 per cent in April from the previous month -- the lowest since December 2012.

The city fringe area led the fall with prices dropping 3.6 per cent.

This is followed by a 2.3 per cent drop in the city area, while prices in the suburbs rebounded by 0.4 per cent.

According to SRX, more than half of the non-landed private property buyers paid below recent transaction prices for their units last month.

Property watchers said the downward trend in prices is likely to continue in the short to medium term, largely due to loan rules, but the movement of resale prices may also mirror that of new private homes.

Alan Cheong, senior director of research and consultancy at Savills Singapore, said: "If there are ample numbers of so-called new launches, I think the resale market will also be correspondingly quite active and price wise, it also gives -- if the developers for the new launches maintain the prices -- it also gives confidence in the resale market not to give in too much to the buyers."

SRX estimated that 476 resale transactions were registered in April -- an increase of 24.6 per cent from the previous month. It is also the highest resale volume since October last year.

But the figure is still 26.7 per cent lower compared to the 649 units resold in April last year.

Property analysts said the transaction volume for private resale homes may be affected by the primary market, with some 13,000 units expected to be completed for the rest of the year.

The private resale market is also likely to face competition from another group of developments -- the executive condominiums (ECs).

Donald Han, Chesterton Singapore’s managing director, said: "It (the EC scheme) is still being supported by the government, by virtue of the grants that help to reduce the entry levels. Plus the fact the (EC) market is targeted at the actual owner-occupier market which is least affected by the tightening of loans -- the TDSR (Total Debt Servicing Ratio)."

Government grants to purchase an EC can go up to S$30,000.

Over 11,000 Singaporean families bought ECs from the last quarter of 2010 to the same period in 2013, National Development Minister Khaw Boon Wan said in a blog post on April 24.

Mr Khaw added that the income ceiling adjustments in 2011 saw shifts in the profile of EC buyers over a one-year period.

This includes seeing the proportion of second-time homebuyers rise from 43 to 57 per cent.

As many as five new EC projects may be launched later this year.

These sites are located at Woodlands Avenue 5, Anchorvale Crescent, Punggol Central, Punggol Drive and Yuan Ching Road.

Over at the rental market, an estimated 3,202 units were rented last month, almost flat from March's 3,206 rental transactions.

But on a year-on-year basis, rental volume improved by 9.8 per cent from the 2,917 rental contracts signed in April 2013.

Flash data from SRX also showed that rents edged up 0.2 per cent after reaching a 27-month low in March.

The uptick in rental prices was mainly driven by those in the city fringe which saw a 0.5 per cent increase.

However, rental prices in the city and suburbs continued to soften by 0.6 per cent and 0.2 per cent respectively. 

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