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Resale prices of private apartments, condos inch up again in June

SRX numbers also show a 10% fall in volume of transactions from May to June

By Kalpana Rashiwala

[email protected]@KalpanaBT

JUL 15, 2015


FOR the second straight month, resale prices of private apartments and condos have inched up on a month-on-month basis, according to SRX Property. But year on year, its latest flash estimate shows that the price index for such homes in June was 1.6 per cent lower.

Giving a geographical breakdown, SRX Property said that year on year, non-landed private residential resale prices have dropped by 7.1 per cent in Core Central Region (CCR) and 2.3 per cent in Outside Central Region (OCR). However, prices in the city fringe or Rest of Central Region (RCR) have climbed 6 per cent.

A comparison of price indices for the three regions against their respective recent peaks in 2013, too, shows that RCR has fared relatively better; the sub-index for this region has eased 2.9 per cent from its most recent high in August 2013. In OCR (where suburban condos are located), prices have slipped 7.2 per cent since June 2013, while CCR prices have borne the brunt of the drop, sliding 11.5 per cent after hitting a high in October 2013.

In late-June 2013, the government introduced the total debt servicing ratio framework, requiring banks when granting new property loans to ensure that a borrower's total monthly debt obligations do not exceed 60 per cent of gross monthly income.

SRX Property's flash estimate released on Tuesday shows that its overall resale price index for non-landed private homes rose 0.4 per cent in June over the previous month. Its revised index for May reflects a marginal 0.1 per cent month-on-month gain, against zero change earlier when the flash estimate for May was released.

In June, prices dipped 0.8 per cent in CCR but rose 1.1 per cent in RCR and 0.5 per cent in OCR.

Resale volume of non-landed private homes fell 10 per cent to 552 units in June from 613 units in May.

R'ST Research director Ong Kah Seng said that this was expected, given the June school holiday period.

Year on year, the resale volume was 34 per cent higher than 412 units in June 2014.

Wong Xian Yang, senior manager, research and consultancy at OrangeTee, said: "Looking at transaction volumes in the first half of this year, we note a steady increase of volumes on a y-o-y basis, and this is probably due to the lower number of units launched by developers in H1 2015 against the same period last year. "The reduction of new launches in the primary market would have diverted demand towards the resale market, and this would have an uplifting effect on prices. However, barring any changes in cooling measures, there is still room for prices especially in the OCR to go lower in view of declining rents and the residential supply overhang."

Another nugget from SRX Property's data was that the overall median transaction over X-value (TOX) remained zero in June, the third consecutive month this has happened. Prior to that, the figure was negative S$10,000 for four consecutive months.

The median TOX measures how much people are overpaying or underpaying against the computer-generated estimated value or the so-called X-value. Eugene Lim, key executive officer at ERA Realty, suggested that three consecutive months of zero TOX value "may be an indication that prices in the resale market have stabilised".