Resale transactions for non-landed private homes surged 47.6 per cent last month from the previous month, rebounding after four straight months of decline as prices inched higher, but analysts say it remains to be seen if the market has bottomed out.
Resale volume jumped to 577 homes last month from the 391 units registered in February, flash estimates from SRX Property showed on Tuesday (April 12), the highest level since the 586 homes resold in July last year.
On a year-on-year basis, last month’s volume was 19 per cent higher compared with the 485 units resold in March 2015.
Analysts said the steep rise in the resale volume was encouraging, especially at a time when new launches such as The Wisteria in Yishun and Cairnhill Nine also did well during the month. This means potential buyers are coming back into the market in force after the seasonal Chinese New Year lull.
“Historically, the month after Chinese New Year is a good month for the property market. That’s when we can see volume spiking. Forty plus per cent is quite a big jump and I find it encouraging that it is also higher than March 2015,” said Mr Wong Xian Yang, OrangeTee’s senior manager for research and consultancy.
“However, I think it is premature to say the market is on firmer footing. Rents are still falling due to the huge supply of completed homes and the economic outlook is not looking great.”
ERA key executive officer Eugene Lim also said that economic conditions remain challenging, but added that the private housing resale market should remain active until July before the market turns quiet again during the Hungry Ghost Festival.
“Sellers who are in a pinch may decide to cut their losses to sell now rather than later, so buyers with the capacity and ability to pick up properties are in an increasingly favourable position,” he said.
“Serious sellers should right-price their units and capitalise on this active period to secure their buyers. Pushing for a premium price is not realistic in current market conditions as buyers remain very price conscious.”
Non-landed private residential resale prices inched 0.3 per cent higher last month from February, showed the SRX Property data. However, on a year-on-year basis, last month’s resale prices dropped 1.3 per cent from March 2015.
Prices in the Outside Central Region, or suburbs, rose 1.3 per cent in March from the previous month, while those in the Rest of Central Region, or city fringes, inched up 0.1 per cent. On the other hand, prices in the Core Central Region, or city centre, fell 1.7 per cent.
Given that the property cooling measures and loan curbs are here to stay, analysts said prices should continue their general downtrend, notwithstanding monthly fluctuations.
“My expectation is that it is unlikely prices would rebound,” said Mr Wong.
“More likely than not, prices should show more stabilisation, perhaps with price declines narrowing in the next one or two quarters.”
On Monday in Parliament, Minister for National Development Lawrence Wong reiterated the Government’s stance not to roll back any cooling measures, saying it is “too early to declare victory” even though the policies have been effective so far in stabilising the market.
Source : Today – 12 Apr 2016