Both resale prices and transactions for Housing Board flats dropped at the turn of the new year, further delaying hopes of a market recovery.
Property experts have told The Straits Times it was likely to be a seasonal dip and they expect prices to remain relatively flat over the year.
Overall prices in both mature and non-mature estates fell 0.5 per cent from December to January, according to flash figures released by SRX Property yesterday.
This comes after half a year of prices inching up amid a cool market.
Prices have slid 11.1 per cent since their peak in April 2013, and 1.3 per cent from a year ago.
Last month's drop was led by three-room and four-room flat prices, which fell by 0.5 per cent and 1 per cent, respectively.
Five-room and executive flat prices, however, went up by 0.2 per cent and 1.4 per cent, respectively.
The number of transactions also fell. There were 1,286 flats sold in January, down from the 1,407 that changed hands in December.
This means resale volumes are down 64.8 per cent from their peak of 3,649 units in May 2010.
PropNex Realty chief executive Mohamed Ismail Gafoor said the dip in price and volume is typical of this period.
"Most buyers and sellers would be focusing on their work and their children as they begin their school terms," he explained.
"February will also likely follow a similar trend due to the Chinese New Year holidays."
ERA Realty key executive officer Eugene Lim said the price decrease is "not a cause for concern", as prices should remain stable for the rest of the year.
"With HDB's official transaction data often used as the basis for the negotiation of the sale price nowadays, prices rarely differ much from those of recently transacted, comparable units," said Mr Lim.
But even with stabilising prices, R'ST Research director Ong Kah Seng believes the resale market is "nowhere near" a recovery.
He said price increases would not be sustained as long as property cooling measures, such as the mortgage servicing cap, stay in place.
This limits the proportion of gross income that can be used to service a loan for an HDB flat to 30 per cent.
National Development Minister Lawrence Wong said, at the end of last year, that it was still too early to unwind the cooling measures.
Home Affairs and Law Minister K. Shanmugam echoed this view on Wednesday, but added that the Government will review the current measures when risks are "less or manageable".
Overall, HDB resale flats transacted last month went for a median $1,000 under their market value, or X-value.
The X-value is derived from SRX Property's computer-generated appraisal of home market values.
It takes into account factors such as unit size, floor level and recent resale prices in the vicinity.
Flats in Bishan, long popular for being in a centrally-located mature estate, logged a median $19,000 over their X-value last month.
This article was first published on Feb 5, 2016.
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