Resale prices of non-landed private homes rose for the third straight month in May alongside higher sales volumes - signs perhaps that sentiment in the property market is perking up.
Prices of resale private condominium units climbed by 0.4 per cent last month over April, while transactions shot up 35.7 per cent, with an estimated 840 units resold in May compared with 619 in April, SRX Property said yesterday.
"A significant contributor to the increase in volume is the greater number of resales at OUE Twin Peaks under the deferred payment scheme," SRX noted.
May's modest price growth follows a revised 0.6 per cent gain in resale prices in April.
Analysts told The Straits Times yesterday that prices appear to be stabilising and "astute buyers" have been active in the resale market.
ERA Realty Network key executive officer Eugene Lim said: "The market could possibly be bottoming, as SRX figures show that resale prices have been rather stable in the past year. However, given the headwinds in the market, we do not anticipate any significant upswing in prices in the short term."
PropNex Realty chief executive Ismail Gafoor said: "The increasing interest rates could also have pushed them to buy at the current lower prices as compared to waiting longer."
The rise in resale prices last month was broad-based. Prices inched up 0.4 per cent in the core central region, and rose 0.3 per cent in the city fringe and 0.5 per cent in the suburbs from April to May.
Overall resale prices for non-landed private homes rose 0.2 per cent in May over the same month last year.
OrangeTee senior manager for research and consultancy Wong Xian Yang said: "It seems to suggest that sentiment may be slowly improving. That said, buyers are still very price-sensitive, in part due to the cooling measures."
One statistic that stood out in the latest data was the 4.7 per cent increase in resale prices in the core central region in May, compared with the same period a year ago.
ERA's Mr Lim said this was the highest increase in resale prices for city homes since the roll-out of the total debt servicing ratio framework in June 2013. The price rise was largely driven by sales at two completed luxury projects - OUE Twin Peaks and Wheelock Properties' Ardmore Three - after developers offered steep discounts.
Newly completed projects like these are included in the resale category after they receive their Certificates of Statutory Completion.
Based on caveats lodged in May, OUE Twin Peaks sold at least 66 units while Ardmore Three moved at least 19 units in the month, analysts said. Homes in the city have started to look attractive after a lengthy period of slow sales following a series of cooling measures.
Savills Singapore research head Alan Cheong noted: "Feedback from agents on the ground points to renewed interest in CCR (core central region) properties as many buyers feel that value is emerging in this segment of the landed and non-landed private residential market."
Analysts expect city homes to continue to see "price support" with the upcoming launch of the City Developments luxury project Gramercy Park.
However, overall resale prices are likely to still face downward pressure owing to the cooling measures, weak economic outlook and the large supply of new homes. OrangeTee expects private resale home prices to dip by up to 3 per cent this year.
This article was first published on Jun 15, 2016.
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