Resale Volume of Private Homes Up in July

SINGAPORE — The number of non-landed private homes resold last month climbed 33.4 per cent from July a year ago as prices fell 0.9 per cent, with analysts saying the housing market will remain under pressure from property cooling measures, high vacancy rates and rising interest rates. Excellent sales have also been clocked at new launch The Brownstone EC and existing executive condo such as The Terrace EC and Skypark Residences.

In its monthly flash report released today (Aug 13), SRX Property estimated that 515 non-landed private residential units were resold last month, up from the 386 units sold in the same month last year.

Despite the gain, analysts said the resale volume did not reflect a healthy market.

“Looking at the transactions compared to the total stock of 246,825 completed non-landed units, the volume is low and represents only a tiny turnover. Most of the buyers are buying out of need, not for investment reasons. There is nothing much to cheer about,” said Mr Ku Swee Yong, chief executive of property firm Century 21.

“The volume is anaemic. What we lack now is the volume from investors. Investors may still be going for new launches or taking a backseat and having a wait-and-see approach as the General Election draws near,” said Mr Ku. He added that a resale volume of 1,000 units per month would put the housing market on a firmer footing.

On a month-on-month basis, resale volume fell 10.4 per cent from the 575 units resold in June, according to the SRX Property data, as buyers showed more interest in new launches.

“Over at High Park Residences, more than 1,100 units were sold over one weekend, and this could possibly have taken substantial demand away from the resale market,” said Mr Eugene Lim, key executive officer for ERA.

From a month ago, resale prices rose slightly, as gains in the city centre and suburbs offset the decline in the city fringes.

“Prices edged up by 0.3 per cent in the month of July, the second consecutive month that prices have increased. The increase was mainly due to the higher prices in the Core Central Region (CCR) and Outside Central Region (OCR),” said Mr Lim.

Homes in the CCR and OCR registered price increases of 1.7 per cent and 1 per cent from June, respectively, while prices in the Rest of Central Region (RCR) slumped by 2.2 per cent.

“Provided there are no economic shocks, we do not expect prices to move much, as the Government has made it rather clear that the cooling measures will not be removed any time soon,” said Mr Lim.

“For the whole year, it is likely that overall prices will experience a decrease of 5 to 6 per cent due to increasing vacancies and interest rates hikes,” he added.

The plunge in the Chinese yuan this week, which triggered a sell-off in the Singapore dollar and in turn drove the Singapore Interbank Offered Rate (SIBOR) – the benchmark used to price most mortgages – to a four-month high on Wednesday, will also hold prospective buyers back in the coming months, said Mr Ku.

“Investors would hold back or consider buying a smaller unit…They would be less likely to step in at this moment and may consider to continue being a tenant instead,” he said.

executive condo photo 2