Resales of apartments, condos up 6.6% in Nov

http://www.businesstimes.com.sg/real...s-up-66-in-nov

Resales of apartments, condos up 6.6% in Nov

Overall median Transaction Over X-value is S$0, the first time the figure is non-negative since October 2013, SRX Property's flash estimate shows

10 Dec


THE latest flash estimates from SRX Property show that 388 non-landed private homes were transacted in the resale market in November, down 22.4 per cent from October but up 6.6 per cent year on year.

SRX Property's November flash estimate for its non-landed private residential resale price index reflected declines of 1.1 per cent month on month and 3.4 per cent year on year. Since the recent peak in January 2014, the index has eased 6.3 per cent.

Giving a geographical breakdown, SRX Property said the flash estimates show that prices slipped month on month by 1.3 per cent in Rest of Central Region (or RCR, covering city-fringe areas) and Outside Central Region (or OCR, covering suburban areas).

Core Central Region (or CCR, comprising the Downtown Core Planning Area, the old postal Districts 9, 10 and 11, and Sentosa Cove) saw a 0.1 per cent dip.

Since December last year, the price index for RCR has posted the biggest decline of 6.1 per cent, followed by falls of 5 per cent in CCR and 3.7 per cent in OCR.

The overall median Transaction Over X-value (TOX) - an indicator of how much buyers pay over past transacted prices of comparable units - was S$0 in November 2014. This is the first time the figure has turned non-negative since October 2013. In October this year, the median TOX was negative S$4,000.

The X-Value is the estimated value of the unit based on past transacted prices.

SRX Property CEO and co-founder Sam Baker said: "When sales volume is this low, macro-analysis becomes less relevant and individual transactions are more pronounced.

"On the macro level, we can project, with reasonable certainty, that demand will continue to be anaemic and prices will be relatively stubborn until there is a significant change to cooling measures, interest rates, supply, or an external shock, or some combination of the above.

"Until then, the action is at the street level and requires micro-analysis. Fifty per cent of buyers in November paid above the X-Value for their unit and 50 per cent paid below it. This means that not all buyers and sellers are being impacted by the cooling measures in the same way. A good percentage of expert agents and clients are using data to transact the right home at the right price in their particular project or street."

For districts with more than 10 resale transactions in November 2014, District 9 had the highest median TOX of S$80,000, followed by S$30,000 in District 22 and S$15,000 in District 11. This means that the majority of the buyers in these districts purchased units above the computer-generated market value, SRX Property noted.

At the other end of the spectrum, the lowest median TOX was in District 5 with TOX of negative S$40,000, followed by negative S$20,000 in District 16, and negative S$15,000 in District 19.

"This means that the majority of the buyers in these districts has purchased units below the computer-generated market value," SRX Property said.

PropNex CEO Mohd Ismail said: "Buyers are in no urgency to make a commitment in the resale market unless they need a roof over their head or from an investment angle they are getting a really good deal ie the entry price is discounted and takes into consideration the expected slide in prices in the coming months. Otherwise, from a logical perspective, the transactions will not take place. We can continue to expect a low volume of transactions."

ERA Realty key executive officer Eugene Lim too said that "in the absence of any tweaks to the current slew of measures and any market shocks, we can expect (the) standoff between sellers and buyers to flow well into 2015".

He forecast price declines for non-landed private homes to be no more than 8 per cent for the whole of this year. "For 2015, we can possibly expect price declines to continue moderately in the region of 5-8 per cent for the whole year."

DTZ SE Asia chief operating officer Ong Choon Fah noted that "the secondary market is quite disparate compared with the primary market where developers have a better influence over pricing".

R'ST Research director Ong Kah Seng expects resale prices of non-landed private homes to ease up to 7 per cent next year assuming none of the cooling measures are removed in the second half of the year. "If there is lifting of cooling measures in H2 2015, we could see a price decline of up to 5 per cent for on a full-year basis."

He argued that any scale-back of cooling measures in the second half of next year would not result in a rapid rise in resale private home prices. "Investors understand there is substantial amount of private residential completions that will intensify leasing competition, while those buying homes for their own occupation would generally prefer to buy a property from a developer offering a better and more modern design than to pick an older, completed property in the resale market."