http://www.straitstimes.com/archive/...homes-20140311

Prices, transactions fall for resale homes

Last month's figures reflect anaemic wider property market, say observers

Published on Mar 11, 2014

By Cheryl Ong


A FRESH sign of the fast slowing property market emerged yesterday with resale homes selling for lower prices last month.

The number of resale transactions also slumped to their lowest level in more than five years.

Market watchers said the latest data reflects the anaemic wider property market, which is cooling rapidly as a result of loan curbs.

Softening prices in the public housing market also turned buyers' attention away from private homes, they added.

Prices of private resale homes fell by 2 per cent in February from the preceding month, according to estimates released by the Singapore Real Estate Exchange (SRX) yesterday. This reversed a 1.9 per cent gain recorded in January.

Mr Nicholas Mak, research head at property firm SLP International, said buying demand was dampened by the Total Debt Servicing Ratio, which curbs excessive borrowing, and the Additional Buyers' Stamp Duty (ABSD).

He added: "The monthly increases are not sustainable; (transaction) volume in the whole market is so thin in both the primary and secondary markets. In such a situation, it is fairly unusual for prices to have sustained increases."

Just 242 non-landed private resale homes were sold last month, falling by 18.5 per cent from January - the lowest level since December 2008 just after the global financial crisis erupted, when only 234 units were sold, SRX said.

Falling prices of resale HDB flats also drew buying demand away from the private market, Mr Mak noted. "When HDB resale prices and volumes drop, some potential buyers will buy HDB flats because they're cheaper," he said.

Flash figures from SRX released last week showed that HDB resale prices slid by 1.8 per cent, reversing a marginal increase of 0.3 per cent in January, while the median cash premium for resale flats fell to zero.

R'ST Research director Ong Kah Seng said that buyers mindful of weak leasing demand, caused by tighter manpower policies, will be discerning when buying a resale property for investment now.

Prices in the city centre led the decline, dropping by 3.9 per cent. Suburban home prices registered a 1.8 per cent slide. But city fringe units bucked the trend with a 0.4 per cent climb in prices.

The ABSD that buyers need to fork out for luxury homes could amount to a hefty sum, hitting sales in the city centre.

Overall rental prices of non- landed private homes fell by 1 per cent last month, reversing a rebound of 1.2 per cent in January.

Experts said the rental market will continue to weaken when more completed private homes flood the market over the next two years. Mr Mak said he expects rents this year to drop by 4 to 8 per cent from last year.

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