Slight rise in private resale home prices

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Slight rise in private resale home prices

Such units usually cost less than new ones and are easier to finance: Expert

Published on Oct 01, 2013

By Cheryl Ong


DEMAND for suburban units and shoebox apartments helped private resale home prices inch up in August.

Prices rose 0.1 per cent, down a touch from a revised 0.4 per cent price increase from June to July, according to the Singapore Residential Price Index (SRPI) yesterday.

The SRPI is compiled every month by the National University of Singapore, which monitors a basket of completed non-landed projects excluding executive condominiums.

Consultants said they expected the modest price increase given new rules that have made it harder for borrowers to take on a mortgage.

R'ST Research director Ong Kah Seng said more buyers are finding themselves sidelined by the loan curbs while investors who can still afford a property are looking for cheaper options.

He noted that resale properties usually cost about 20 per cent less than new ones and are easier to finance under the revised borrowing rules.

Investors might also be opting for resale units as they can be leased out immediately, compared to new units still under construction, he added.

Prices of resale shoebox units - they are around 500 sq ft - rose by 1 per cent in August over levels in the previous month, down from a 2.1 per cent increase from June to July.

This was partly supported by the trend of buyers looking for homes with a lower total quantum, thanks again to the loan curbs.

"The total debt servicing ratio also encourages buying a lower-cost property on a quantum basis," said Mr Ong

"Those looking to buy a two-bedroom apartment, but find that their income cannot grant them a sufficient loan, will start thinking of buying a one-bedroom apartment," he added.

Excluding small units, prices of suburban resale private units inched up 1 per cent in August over July. This was up from a revised increase of 0.4 per cent from June to July.

However, the SPRI also showed that prices of centrally located homes dipped 1.1 per cent from July, reversing a 0.4 per cent price rise from June to July.

This comes on the back of a large stock of unsold units and soft rental demand for completed homes in the city centre.

This means resale prices of city centre homes are expected to continue to dip gradually, analysts said.

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Property prices rise marginally in Q3

Published on Oct 02, 2013

By Cheryl Ong


DEMAND for cheaper mass- market homes in the wake of tougher loan rules pushed up overall property prices marginally in the third quarter.

Prices of non-landed homes rose 0.4 per cent in the three months to last month, down from a 1 per cent increase in the previous quarter, according to Urban Redevelopment Authority (URA) flash estimates yesterday.

Analysts said the introduction of the total debt servicing ratio in June has dampened prices as buyers are finding it harder to finance new homes.

The rules cap a borrower's total monthly debt payments at no more than 60 per cent of his gross monthly income.

Prices of non-landed homes in both the central and city-fringe areas fell in the third quarter, with only suburban apartments and condominiums registering rises.

In the central areas, prices declined 0.5 per cent, following a 0.2 per cent slip in the second quarter.

Prices of city-fringe homes fell by 1.1 per cent - the first decrease since the first quarter of last year, said the URA. Prices had risen 0.2 per cent in the second quarter.

"With affordability being a main concern in the current market, demand for homes in the higher-tiered segments in the city fringes and city centre had become comparatively more subdued, and this resulted in price declines," said Colliers director of research and advisory Chia Siew Chuin.

In contrast, prices of suburban non-landed homes gained 2.1 per cent in the third quarter, although the rise was also lower than the 3.8 per cent recorded in the second quarter.

Buyers have become more price sensitive and are looking at units costing between $800,000 and $1.2 million, said ERA Realty key executive officer Eugene Lim, adding that "these are mostly found in the suburbs".

The flash estimates are based on data from the first 10 weeks of the July to September period and will be updated in four weeks.

CBRE Research associate director Desmond Sim said that when sales from launches in the last two weeks are included - namely, those at Thomson Three and Sky Vue - in the revised price index, overall prices might rise to match last quarter's figures.

Experts added that developers are likely to continue to adjust selling prices to move sales.

"With more launches expected in the last quarter this year, we expect a healthy demand as long as developers price their pro- jects right," said PropNex Realty chief executive Mohamed Ismail.

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