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03-02-14, 15:36
http://www.straitstimes.com/archive/wednesday/premium/money/story/private-home-resale-prices-slide-07-20140129
Private home resale prices slide 0.7%
Published on Jan 29, 2014
By Melissa Tan
PRIVATE home resale prices in Singapore fell even faster last month, dragged down by home prices in the suburban areas.
Analysts said resale prices would likely slide further this year as buyers remain choosy.
However, some added that the drop could be cushioned by delays in new project completions, which would lower the threat of a private home glut.
Overall resale prices fell 0.7 per cent in December from November, according to Singapore Residential Price Index (SRPI) flash estimates released yesterday.
The slide was steeper than the 0.5 per cent fall in November from the month before. Initial figures had estimated a 0.1 per cent gain from October to November.
Property consultants said that the broad-based decline in resale prices in December was partly caused by the festive season.
Restrictions on home loans that took effect in June last year also played a big role, they said.
R'ST Research director Ong Kah Seng said that even though resale homes tend to be about 20 per cent cheaper than new units, they require almost immediate financing whereas new units tend to allow payment to be made progressively over time.
He added that since developers have started to cut new launch prices, home owners who want to resell their flats also have to lower their asking prices in tandem.
The biggest resale price drop in December was in suburban areas, where homes recorded a 0.9 per cent drop from the preceding month. They had dipped 0.1 per cent in November from October.
Prices of private homes in the central area slipped 0.3 per cent in December, a milder decline than the revised 0.9 per cent tumble in November from October.
These figures exclude shoebox units, which saw a 0.6 per cent decrease in prices from November to December. This came after their prices fell a revised 0.5 per cent from October to November.
Mr Ong said he expected demand for resale homes to be "fairly modest" this year, with homes in central areas being harder hit because of a large unsold stock.
SLP International research head Nicholas Mak added: "As home buyers will become in- creasingly selective and price sensitive, the suburban property market will benefit as most of the affordable homes are located in the suburbs".
He thinks that overall resale prices could fall by 5 per cent to 10 per cent this year.
However, Credit Suisse analyst Yvonne Voon said in a note yesterday that prices in the overall private residential market - which includes new sales and resales - could hover at current levels this year.
"We expect overall prices to be relatively flattish as we do not anticipate a severe oversupply situation."
Delays in new project completions could mean that the risk of oversupply "may not be as bad as expected", she said.
There were 13,150 private homes completed last year, excluding executive condominiums.
This was 21.5 per cent lower than the 16,742 completed private homes that the Urban Redevelopment Authority (URA) initially estimated for 2013 in its first-quarter report last year.
Ms Voon said this was "similar to what we saw in 2012" when the URA said 13,801 private homes would be completed but only 10,329 were, meaning that 25.2 per cent of the predicted unit completions were delayed.
The SRPI is compiled every month by the National University of Singapore, which monitors a basket of completed non-landed projects excluding executive condominiums.
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Private home resale prices slide 0.7%
Published on Jan 29, 2014
By Melissa Tan
PRIVATE home resale prices in Singapore fell even faster last month, dragged down by home prices in the suburban areas.
Analysts said resale prices would likely slide further this year as buyers remain choosy.
However, some added that the drop could be cushioned by delays in new project completions, which would lower the threat of a private home glut.
Overall resale prices fell 0.7 per cent in December from November, according to Singapore Residential Price Index (SRPI) flash estimates released yesterday.
The slide was steeper than the 0.5 per cent fall in November from the month before. Initial figures had estimated a 0.1 per cent gain from October to November.
Property consultants said that the broad-based decline in resale prices in December was partly caused by the festive season.
Restrictions on home loans that took effect in June last year also played a big role, they said.
R'ST Research director Ong Kah Seng said that even though resale homes tend to be about 20 per cent cheaper than new units, they require almost immediate financing whereas new units tend to allow payment to be made progressively over time.
He added that since developers have started to cut new launch prices, home owners who want to resell their flats also have to lower their asking prices in tandem.
The biggest resale price drop in December was in suburban areas, where homes recorded a 0.9 per cent drop from the preceding month. They had dipped 0.1 per cent in November from October.
Prices of private homes in the central area slipped 0.3 per cent in December, a milder decline than the revised 0.9 per cent tumble in November from October.
These figures exclude shoebox units, which saw a 0.6 per cent decrease in prices from November to December. This came after their prices fell a revised 0.5 per cent from October to November.
Mr Ong said he expected demand for resale homes to be "fairly modest" this year, with homes in central areas being harder hit because of a large unsold stock.
SLP International research head Nicholas Mak added: "As home buyers will become in- creasingly selective and price sensitive, the suburban property market will benefit as most of the affordable homes are located in the suburbs".
He thinks that overall resale prices could fall by 5 per cent to 10 per cent this year.
However, Credit Suisse analyst Yvonne Voon said in a note yesterday that prices in the overall private residential market - which includes new sales and resales - could hover at current levels this year.
"We expect overall prices to be relatively flattish as we do not anticipate a severe oversupply situation."
Delays in new project completions could mean that the risk of oversupply "may not be as bad as expected", she said.
There were 13,150 private homes completed last year, excluding executive condominiums.
This was 21.5 per cent lower than the 16,742 completed private homes that the Urban Redevelopment Authority (URA) initially estimated for 2013 in its first-quarter report last year.
Ms Voon said this was "similar to what we saw in 2012" when the URA said 13,801 private homes would be completed but only 10,329 were, meaning that 25.2 per cent of the predicted unit completions were delayed.
The SRPI is compiled every month by the National University of Singapore, which monitors a basket of completed non-landed projects excluding executive condominiums.
[email protected]