Resale condo prices up in May, with more sold

[reporter2]

Resale condo prices up in May, with more sold

JUN 14, 2017

Prices rise 0.4% over April, number of deals up 17.4%, but experts split on whether it signals market recovery


More sales and higher prices last month have sparked talk that the property market could finally be on the cusp of recovery after a three-year slump.

Resale prices of private condominiums rose 0.4 per cent last month over April while the number of transactions shot up 17.4 per cent, according to SRX Property flash estimates yesterday.

Prices were ahead 1.5 per cent from May last year.

SRX Property said last month's uptick in resale prices followed a revised 0.2 per cent decline from March to April. The increase was led by improvements in the core central and city-fringe regions - each rose 1.1 per cent from April - but the suburbs recorded a marginal price decline of 0.4 per cent from April to last month.

The big mover came in the area of transactions, with 1,235 private condos resold last month - up a striking 57.7 per cent from the 783 shifted in May last year and 17.4 per cent ahead of April.

Despite the better numbers, there are mixed views on whether they herald a market recovery.

"The market has turned after an over-extended downcycle... I believe prices will rise gradually over the course of the year," noted Mr Alan Cheong, head of research at Savills Singapore.

Dr Lee Nai Jia, head of South-east Asia research at consultancy Edmund Tie and Company, said: "The price trend, together with the diminishing supply of unsold units in the primary market and higher land bids, do suggest that the market has bottomed and stabilised."

But consultancy OrangeTee told The Straits Times that it is premature to make that call owing to the challenging leasing market.

Said its research and consultancy head Wong Xian Yang: "Rents are still falling and would continue to exert downward pressure on prices, so it might be too early to call a bottoming out of the market."

However, Mr Wong expects resale volumes to continue to increase as buyers return to pick up units amid improving sentiment and relatively low interest rates.

Dr Lee added that the healthy sales at new project launches, bullish bids for development sites among developers and the recent surge in collective deals will further stoke buying interest.

Overall private home values - including new and resale properties - had fallen by 11.6 per cent from a peak in the third quarter of 2013 to March 31 this year.

SRX's median transaction over X-value (TOX) - which measures if buyers are overpaying or underpaying its computer-generated market value - came in at $2,000 last month compared with $5,000 in April.

Harbourfront and Telok Blangah districts posted the highest median TOX at $60,000, while Changi district recorded a negative TOX of $21,000, which meant that most buyers in that district bought units below SRX's computer-generated value.

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Resale condo prices up 0.4% in May: SRX

But analysts are reluctant to say there is a bottoming out of the resale market just yet

June 14, 2017

LYNETTE KHOO


RESALE prices of private non-landed homes in Singapore rose 0.4 per cent in May, led by improvements in the prime and city-fringe regions, flash estimates from SRX Property show.

The price change in April was revised from "no change" to a 0.2 per cent dip. Still, SRX Property's resale index is showing an overall recovery since last November. Resale prices in May were 1.5 per cent higher than a year ago, also buoyed by the prime and city-fringe areas.

But some analysts are reluctant to call it a bottoming out of the market just yet, noting that other market indices such as the NUS Singapore Residential Price Index, which tracks completed private apartments and condominiums, and the Urban Redevelopment Authority's private residential price index are still showing a downtrend.

"It is still uncertain if prices have indeed bottomed out and are on an uptrend," said OrangeTee head of research and consultancy Wong Xian Yang.

"I would say the market is still in the midst of bottoming out and may stabilise by the end of the year, barring an unforeseen deterioration in economic conditions," he added.

SRX Property data shows that both the Core Central Region (CCR) and the Rest of Central Region (RCR) recorded an increase of 1.1 per cent in resale prices in May while the Outside Central Region (OCR) saw a price decrease of 0.4 per cent.

Resale volumes of 1,235 units in May were 17.4 per cent more than the month before, and 57.7 per cent more than in May last year, based on SRX Property's estimates.

SLP International executive director Nicholas Mak felt that what is clear for now is that there is an improvement in buying sentiment. Some potential buyers have stopped sitting on the fence and are looking to buy investment properties.

URA's data for the first quarter showed a 14th straight quarter of decline in private home prices, but the 0.4 per cent drop was the smallest dip in the past quarters, with non-landed home prices staying flat during the quarter. This, analysts note, has affirmed that a bottoming-out is still under way.

Lee Nai Jia, head of South-east Asia research at Edmund Tie and Company, noted that notwithstanding month-to-month fluctuations in resale prices, there is increased likelihood of prices trending up, with recent bullish bids for land sold by the government and en bloc sites partially contributing to this.

"Notwithstanding, the pace of increase is likely to be at a moderated pace, as the overall price index may be weighed down by prices of properties in locations with more completions or in less popular locations," Dr Lee said.