http://www.businesstimes.com.sg/real...ue-to-stagnate

Feb condo resale prices continue to stagnate

By Kalpana Rashiwala

[email protected]@KalpanaBT

11 Mar


RESALE prices of condominiums and private apartments continued to stagnate, remaining flat in February over the preceding month, according to flash estimates released by SRX Property on Tuesday.

SRX Property also said that the month­on­month change in the price index for January 2015 has been revised from a 0.2 per cent decrease to unchanged.

Said PropNex CEO Mohamed Ismail: "The market has been flat month after month because the equation has not changed and people have already come to terms with the fact that the cooling measures are unlikely to be tweaked in the near future. So the urgency to buy is not there. As far as sellers are concerned, they are not prepared to go much lower than the current price levels which have already come down. That's why we see month after month, minimal price movement."

What could break this stalemate is an improvement in sentiment, he added. "If there is any tweaking of cooling measures, it will definitely be positive in terms of a recovery in transaction volumes followed by price appreciation," he added. The stalemate could also be broken by a deterioration in sentiment. "This could happen for instance if the cooling measures are not removed for a long period of time, or if there is a worsening of the global economic situation that could shake confidence."

Year on year, the SRX overall resale price index for non­landed private homes has eased 3.2 per cent from February 2014. Last month's index was also down 5.8 per cent from the recent peak in January 2014.

SRX flash estimate for February showed that prices in Core Central Region (CCR) and in the suburbs or Outside Central Region (OCR) increased 1.5 per cent and 2 per cent month-on-month respectively. But, prices in the city fringe or Rest of Central Region (RCR) fell 0.8 per cent.

R'ST Research director Ong Kah Seng observed that there is still a high degree of price volatility within each of the regions. "In most cases, any price increase for resale properties in a specific region (CCR, RCR, OCR) usually cannot be sustained for more than a month or two. The TDSR (total debt servicing ratio) continues to bite, significantly restricting large property loans and buyers' interest."

Moreover, resale volume islandwide remained low, and this could have further contributed to the "randomness and price volatility" on a month-on-month comparison, he added.

Based on data compiled by SRX Property, an estimated 321 non­landed private homes changed hands in the resale market in February, down 6.7 per cent from 344 units resold in the previous month. Year on year, resale volume was 36.6 per cent higher than the 235 units resold in February 2014.

The February 2015 resale volume is down 84.3 per cent from the peak of 2,050 units in April 2010.

The overall median transaction over X-value (TOX) remained at negative S$10,000 in February 2015, unchanged from the preceding two months. The median TOX measures how much people are overpaying or underpaying against the computer-generated estimated value or the so-called X-value.

According to SRX Property, non-landed private residential prices continue to face downward pressure.