- POSTED: 10 Oct 2013 11:51
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Resale prices of private homes slipped 1.6 per cent in September from August as recent loan curbs took its toll on the market.
SINGAPORE: Resale prices of private homes slipped 1.6 per cent in September from August as recent loan curbs took its toll on the market.
This follows a 0.5 per cent increase in the previous month.
According to data compiled by the Singapore Real Estate Exchange (SRX), the overall price decline last month was led by a 3.5 per cent drop in resale prices of private homes in the city fringes.
Mass market resale home prices also dipped 1.5 per cent.
In contrast, resale prices of homes in the city or Core Central Region (CCR) rebounded by 2.5 per cent after falling for two consecutive months in July and August.
About 462 non-landed homes were resold in September, up slightly from August's 447 units.
This brought the total resale volume in the third quarter this year to 1,478 units, a 57 per cent drop compared to a year ago.
Thomas Tan, executive director of RE/MAX, said: “(In the) CCR, (there) are mainly foreigners who are picking up the properties.
"The ABSD (Additional Buyer’s Stamp Duty) has been around for a while. The foreigners who are coming in to pick up these properties are probably used to it right now. And they have already factored it in. And still, they probably see strong demand for such properties in the CCR, because they are really prime properties and you won't find many of them around.”
Since December 2011, foreigners who buy condominiums in Singapore must pay the ABSD.
Affecting buyers’ sentiment in the wider market is the Total Debt Servicing Ratio (TDSR) framework.
Since late June, banks must check that a borrower's total loan repayments do not exceed 60 per cent of gross income.
This effectively reduces the amount of housing loan that home buyers can borrow.
Some analysts also expect an increasing number of transactions to be in the lower quantum of between S$800,000 and S$1.4 million.
More permanent residents (PRs) are also expected to be looking at the private residential resale market because of new HDB rules that require them to be PRs for three years first before being allowed to buy an HDB resale unit.
By 2016, a record 82,500 private homes are expected to be injected into the property market.
Lim Yong Hock, senior vice president at PropNex, said: “Some of these owners would likely lease out their units because they are affected by the Seller’s Stamp Duty.
"Many of them would not sell but would choose to rent it out. With this increased supply, we foresee rentals coming down a fair bit in this next year or so.”
Meanwhile, overall rental prices for non-landed private homes in September fell 1.1 per cent from August, registering the biggest monthly rental price drop since the start of this year.
As for the HDB resale market, the cash-over-valuation (COV) for HDB resale flats dropped by S$3,000 in September to reach S$15,000 - the lowest since Jul 2009, when the overall COV was S$10,000.
Despite the drop in COV, SRX said overall HDB resale prices remained relatively flat with a small increase of 0.2 per cent from August, after four consecutive drops in the preceding months.
An estimated 1,164 HDB flats were sold in the resale market in September, slightly less than the 1,193 flats transacted in August.
This brought the resale volume for HDB flats in the third quarter to 3,661 units, a 33 per cent drop compared to last year.