http://www.straitstimes.com/archive/...op-03-20140829

Private home resale prices drop 0.3%

Published on Aug 29, 2014 12:51 AM

By Mok Fei Fei


RESALE prices of private homes continued their slide last month as buyers held back in a market still feeling the chill of property cooling measures.

Flash estimates out yesterday showed the Singapore Residential Price Index (SRPI) declined 0.3 per cent in July compared with June.

Demand for shoebox units was particularly soft with the index for small apartments - defined as those with a floor area up to 506 square feet - dropping 0.8 per cent.

Prices in the central region fell 0.7 per cent, although the non-central region bucked the trend, rising 0.1 per cent. Both indices exclude small units.

SLP International research head Nicholas Mak said the non-central region was able to eke out a price gain due to a slight return in buying demand after the June holidays.

There were also four new launches in July: Bijou at Queenstown, City Gate at Kallang, Robin Residences at Tanglin and Citron Residences at Farrer.

"These launches attracted more buyers' interest towards the areas of these launches, thereby causing a spillover effect of demand on the resale market," Mr Mak said.

The SRPI, which is compiled by the National University of Singapore's Institute of Real Estate Studies, comprises sub-indices covering prices in the central and non-central regions and small units.

July's results continue the slump seen throughout this year except for a surprise expansion in May which analysts see as a blip that is unlikely to be repeated this year.

Property consultants noted the Government has indicated that the cooling measures, including the total debt servicing ratio (TDSR), which restricts debt levels, are unlikely to be reduced or removed any time soon. That in turn will continue to put a dampener on private home sales, particularly resales.

R'ST Research director Ong Kah Seng said: "Resale properties tend to be older in design and, following TDSR, buyers are prioritising their property purchases and prefer to buy a developer sale that is usually newer in design, even if costlier. They are reserving their 'TDSR limits' to wait for developers to cut prices on newer design properties."

Mr Ong added that July's price fall showed the dip witnessed in June was not due just to the school holidays or the World Cup, which are traditionally slow periods for home sales.

In a sign that prices could be stabilising, the revised SRPI for June came in at a dip of 0.5 per cent, better than the initial estimate of a 1 per cent decrease from May.

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