http://www.straitstimes.com/premium/...march-20130430
Resale home prices rise marginally in March
Published on Apr 30, 2013
By Melissa Tan
RESALE home prices eked out a small rise last month, led by units in the central region.
They rose 0.9 per cent in March from the preceding month, a reversal from February's revised 1.2 per cent fall, according to figures from the Singapore Residential Price Index (SRPI) out yesterday.
Resale prices for apartments in the city area posted a 2.2 per cent increase in March from the preceding month, recovering from February's 3.7 per cent drop.
Shoebox units, which are small apartments measuring 506 sq ft or less, also posted a price increase of 0.7 per cent, after sliding 0.9 per cent in February.
Suburban apartments were the only category to see a drop in March. Their resale prices slipped by a marginal 0.1 per cent, after rising 1 per cent in the previous month.
The SRPI is compiled every month by the National University of Singapore, which monitors a basket of completed non-landed projects excluding executive condominiums.
Analysts said the price rise for resale homes in the city area does not indicate a sustained recovery in the category.
They added that resale suburban home prices likely dipped because a large volume of new launches in suburban areas last month drew buyers away from resale homes.
New home sales hit a record high of 2,793 units last month, mainly due to strong sales at suburban projects such as D'Nest in Pasir Ris and Urban Vista in Tanah Merah, according to Urban Redevelopment Authority (URA) data out two weeks ago.
The seventh round of cooling measures, which took effect on Jan 12, also dampened buying sentiment for city-fringe and suburban homes, due to an increase in the additional buyer's stamp duty for buyers who already own one or more private homes.
"Many investors have adopted a wait-and-see attitude due to the cooling measures... Buyers can afford to be more picky," said ERA Realty key executive Eugene Lim.
R'ST Research director Ong Kah Seng said that some investors may also be more hesitant to buy resale units in suburban areas, where the level of rental demand from expatriates is untested. Mr Ong added that the increase in resale prices in the central region was not a sign of optimism, merely a recovery from dampened sentiment of the prior month.
"There is still a significant unsold supply of completed and under-construction units in the central area, pointing to a possible supply overhang," he noted.
As for shoebox units, Mr Ong said that shoebox owners who are not in a hurry to cash out are holding on to them for better prices.
With the new rule limiting the number of shoebox units a developer can build on suburban sites, which took effect last November, there will be fewer choices for such units, he added.
Mr Lim said that resale volumes are expected to decline moderately for the next few quarters due to the effect of the cooling measures and an increasing supply of private homes.
An estimated all-time high of 18,400 new private homes, including executive condo units, are set to be completed this year, according to URA data last Friday.
Some completions expected for the rest of the year include CapitaLand's The Interlace in Alexandra Road, with 1,040 units, and the 616-unit Waterbank at Dakota.
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