Private resale prices post first dip since July's property curbs

The number of transactions also fell, making it a fourth consecutive monthly tumble in August

Wed, Sep 12, 2018

RESALE prices of private non-landed homes in Singapore took their first dip last month, breaking a 12-month climb to record highs, with the latest property cooling measures having taken effect in July.

Going by flash estimates released on Tuesday on real estate portal SRX Property, resale prices of condominiums and private apartments declined by 0.2 per cent in August from the previous month.

Some property market observers had been expecting private resale prices to stay in positive territory for the rest of the year, but to rise more slowly after higher additional buyer's stamp duty (ABSD) rates and tighter loan-to-value limits took effect on July 6.

The property curbs also had an effect on the volume of transactions, which went tumbling the month after the latest property curbs hit.

The number of private non-landed homes resold in August fell 35.3 per cent to an estimated 694 units, from 1,072 units in July.

This was the fourth consecutive monthly fall in resale volumes, with volume now at the lowest since January 2017.

Year on year, the number of resales last month was down 48.2 per cent from the 1,339 units moved in August 2017.

Commenting on the data, OrangeTee & Tie research and consultancy head Christine Sun said: "These downtrends may be an early indication that resale prices may have peaked in some residential segments and are starting to soften under the current cooling measures."

Even with the dip in August, resale prices are still up 8.8 per cent so far this year. They are also 11.2 per cent higher than a year ago.

August's drop was felt most by apartments in the city fringes or rest of central region (RCR), which fell 1.6 per cent from July; those in the prime district or core central region (CCR) dipped by 0.3 per cent.

These are homes more likely to be bought for investment or speculative purposes and on which the higher ABSD rates and loan limits are likely to apply.

In contrast, resale prices for units in the outlying areas or outside of central region (OCR), which are more likely to be bought by genuine homebuyers, continued on the uptrend, rising 0.8 per cent in August.

In another indication of the wind coming out of the sails of the resale market, the premium that buyers were prepared to pay over market value continued to decline in August after a sharp drop in July, going by another SRX measure.

Its overall median transaction over X-value (TOX) was at zero last month, after having fallen by S$4,000 in July from S$17,000 in June, before the latest cooling measures.

TOX measures how much a buyer is overpaying or underpaying on a property based on SRX Property's computer-generated market value.

Noting that more than half the districts recorded either zero or negative median TOX, meaning more people sold below valuation, Ms Sun said this "may indicate that the winds have shifted from a seller's to a buyer's market".

Among districts with more than 10 resale transactions, district 20's Bishan and Ang Mo Kio posted the highest TOX of S$25,000; district 4's Telok Blangah and Harbourfront posted the lowest TOX of negative S$37,000.