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17-02-15, 11:41
http://www.straitstimes.com/archive/wednesday/premium/money/story/home-resale-prices-head-lower-poor-transaction-volumes-20150211
Home resale prices head lower on poor transaction volumes
Published on Feb 11, 2015 1:20 AM
By Cheryl Ong
THE horror stretch for home resale prices continued last month, with values down amid lacklustre transaction volumes.
Apartment prices fell 0.2 per cent in January from December, according to SRX Property's flash estimates yesterday.
That left the index at 167.2 for January, the lowest since the 166.1 level in September 2012.
Prices have slipped 6.5 per cent since home values hit a record high of 178.8 in January last year, as cooling measures dampened buying sentiment and crimped property sales.
The low number of transactions did not help matters.
Only 282 private homes changed hands last month, compared with 363 resales in December, according to compiled data as at Feb 5.
However, the SRX, which collects data from property agencies and the Urban Redevelopment Authority, expects transactions to hit 370 units when revised figures are released next month.
"The overall trend points unmistakeably to the fact that private residential property prices will continue to weaken in 2015 until the Government significantly adjusts the housing policy," said Mr Nicholas Mak, executive director of SLP International.
City-centre homes led the dip, with resale prices down 1.7 per cent in January from December, while suburban homes suffered a 1.1 per cent fall.
The only bright spark was in the city-fringe market, but analysts said the 1.5 per cent gain there was a statistical blip and did not point to a price recovery.
Mr Eugene Lim, key executive officer of ERA Real Estate, said more buyers will take the chance to pick up homes as prices soften, yet most sellers are not under "tremendous pressure" to offload units.
"Buyers are not likely to make any headway with ridiculously low offers," said Mr Lim.
While resale activity is expected to pick up after Chinese New Year, transaction volumes are still expected to be tempered because of an overhang of new units and restrictive credit conditions.
SRX's median TOX - a measure of whether buyers were overpaying or underpaying - stood unchanged from December at negative $10,000, a clear indication that buyers were still cautious in their bids amid uncertain conditions, experts said.
"The spectre of rising interest rates in 2015 should make buyers pause, and prices are likely to be negotiated lower," said Mr Wong Xian Yang, manager of research and consultancy at OrangeTee.
Going by the number of units sold in the past three months - between 360 and 375 units each month - Mr Mak reckoned that resale volumes would tumble to 4,300 to 4,500 units this year - a low not seen since the Asian financial crisis in 1998.
Last year, 5,407 condominium units were resold, which was an 11-year low.
Homes in District 11, which encompasses Watten Estate, Novena and Thomson, recorded the highest TOX of $60,000, while resale transactions in District 23 had the lowest TOX at negative $31,000. District 23 includes the Bukit Panjang and Choa Chu Kang areas.
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Home resale prices head lower on poor transaction volumes
Published on Feb 11, 2015 1:20 AM
By Cheryl Ong
THE horror stretch for home resale prices continued last month, with values down amid lacklustre transaction volumes.
Apartment prices fell 0.2 per cent in January from December, according to SRX Property's flash estimates yesterday.
That left the index at 167.2 for January, the lowest since the 166.1 level in September 2012.
Prices have slipped 6.5 per cent since home values hit a record high of 178.8 in January last year, as cooling measures dampened buying sentiment and crimped property sales.
The low number of transactions did not help matters.
Only 282 private homes changed hands last month, compared with 363 resales in December, according to compiled data as at Feb 5.
However, the SRX, which collects data from property agencies and the Urban Redevelopment Authority, expects transactions to hit 370 units when revised figures are released next month.
"The overall trend points unmistakeably to the fact that private residential property prices will continue to weaken in 2015 until the Government significantly adjusts the housing policy," said Mr Nicholas Mak, executive director of SLP International.
City-centre homes led the dip, with resale prices down 1.7 per cent in January from December, while suburban homes suffered a 1.1 per cent fall.
The only bright spark was in the city-fringe market, but analysts said the 1.5 per cent gain there was a statistical blip and did not point to a price recovery.
Mr Eugene Lim, key executive officer of ERA Real Estate, said more buyers will take the chance to pick up homes as prices soften, yet most sellers are not under "tremendous pressure" to offload units.
"Buyers are not likely to make any headway with ridiculously low offers," said Mr Lim.
While resale activity is expected to pick up after Chinese New Year, transaction volumes are still expected to be tempered because of an overhang of new units and restrictive credit conditions.
SRX's median TOX - a measure of whether buyers were overpaying or underpaying - stood unchanged from December at negative $10,000, a clear indication that buyers were still cautious in their bids amid uncertain conditions, experts said.
"The spectre of rising interest rates in 2015 should make buyers pause, and prices are likely to be negotiated lower," said Mr Wong Xian Yang, manager of research and consultancy at OrangeTee.
Going by the number of units sold in the past three months - between 360 and 375 units each month - Mr Mak reckoned that resale volumes would tumble to 4,300 to 4,500 units this year - a low not seen since the Asian financial crisis in 1998.
Last year, 5,407 condominium units were resold, which was an 11-year low.
Homes in District 11, which encompasses Watten Estate, Novena and Thomson, recorded the highest TOX of $60,000, while resale transactions in District 23 had the lowest TOX at negative $31,000. District 23 includes the Bukit Panjang and Choa Chu Kang areas.
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