http://www.straitstimes.com/archive/...-weak-20131231

Non-landed resale prices up 0.1%, but demand still weak

Published on Dec 31, 2013

By Cheryl Ong


PRICES of resale homes stayed mostly flat last month, although units in the central region eked out a small rise.

Overall, non-landed private resale prices inched up 0.1 per cent last month from October, according to figures from the Singapore Residential Price Index (SRPI) released yesterday.

But market experts believe the rise was a blip and was unlikely to be sustained.

Still, the monthly result was a marked improvement on October's revised 0.8 per cent dip, led by units in the central region.

Resale prices of apartments in the city area rose 0.3 per cent last month, recovering from October's 1.1 per cent drop.

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

However, other segments recorded a dip in prices.

Suburban apartments edged down 0.1 per cent last month, after dipping 0.5 per cent in the previous month.

Shoebox units - apartments measuring 506 sq ft or less - posted the biggest drop with a decline of 0.6 per cent, after prices were unchanged in October.

Property experts argued that the overall price increase was likely to be an anomaly, especially given that asking prices of private resale homes declined, as developers slashed prices at new home launches.

Century21 chief executive Ku Swee Yong said the index may have been skewed, as it was based on only 339 resale transactions for non-landed private homes.

SLP International's research head Nicholas Mak also attributed the higher prices of central units to a "technical rebound", saying that "housing demand in the prime district is still rather weak, and further price weaknesses can be expected".

"The small data set could have included a few transactions which registered prices that were much higher than in previous months," said Mr Ku.

For example, units at The Montana in Jalan Mutiara were sold at $1,832 to $2,139 per sq ft (psf), above the market price of about $1,600 to $1,800 psf.

A unit at The Orchard Residences also changed hands for $4,312 psf. Mr Ku said the unit was sold above the market price of about $3,600 because it was located on a high floor.

Experts said that prices of resale flats in the non-central region softened as buyers were drawn to new homes on offer in the suburbs.

As for shoebox units, R'ST Research director Ong Kah Seng said that owners have been enjoying healthy leasing demand and are in no hurry to sell. This has led to high asking prices for shoebox units, deterring buyers from the resale market, Mr Ong said.

Overall, experts noted that last month's improvement was not an indicator of a significant improvement in buying interest.

They said the curbs on mortgage financing will still weigh heavily on the minds of home seekers, reining in demand.

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