Resale prices of private homes down 0.5% in May: SRX

Prices of resale private homes softened in May as the government’s cooling measures continued to dampen the market.

Non-landed private residential units showed an overall price drop of 0.5 per cent in May compared to April, according to data from major property agencies compiled by the Singapore Real Estate Exchange (SRX).

Prices of resale non-landed private homes in the city area dropped 0.5 per cent over the previous month while those in the city fringes declined 0.4 per cent.

However, prices of resale suburban private homes remained resilient, reporting a 0.3 per cent increase.

The SRX projected the final volume figure in May to be around 750 units, which would exceed the 671 units sold in April. This would still represent a 40 per cent drop from the same period last year. There were 1,292 non-landed resale cases in May 2012.

Orange Tee’s Head of Research & Consultancy Christine Li said the stand-off in the resale market could be due to the mismatch in expectations between buyers and sellers, who are still reluctant to reduce asking prices amid record property prices.

As a result, buyers prefer to buy directly from developers who are offering discounts and incentives.

Meanwhile, overall rental prices for non-landed private residential in May slipped 0.6 per cent from April, marking a fourth consecutive monthly drop in overall rents.

Ms Li expects rentals to slide further in the upcoming months, given the strong pipeline of new private homes slated for completion this year.

On the public housing front, overall median Cash-Over-Valuation (COV) for HDB flats dropped S$4,000 to reach S$26,000 – the lowest level since July 2012.

Overall HDB resale prices also showed signs of stabilising, recording a 0.1 per cent drop in May.

An estimated 1,300 HDB resale transactions are expected to be closed in May – a drop of 10 per cent compared to April and about 35 per cent lower compared to the same period last year.

Ms Li said revised government policies on HDB flats as well as the bumper crop of 8,000 new units released under the Build-To-Order and Sales of Balance Flats schemes helped divert demand away from the resale market in May.

For the first time in a year, overall HDB median rents dropped by S$50 to end at S$2,350 in May 2013, after remaining constant at S$2,400 since June 2012.

Source : Channel NewsAsia – 7 June 2013

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