Home prices in Q2 continue lacklustre run

Home prices in Q2 continue lacklustre run

HDB prices remained flat in the second quarter while private home values showed signs that they are nearing the bottom, according to flash estimates out yesterday.

Housing Board resale prices rose an estimated 0.1 per cent in the three months to June 30 after falling 0.1 per cent in the first quarter.

Prices in the private sector slowed their decline, falling 0.4 per cent after slipping 0.7 per cent in the first quarter, with an apparent recovery in high-end homes.

HDB resale prices are now 9.8 per cent below their last peak while overall private home prices are 9.4 per cent below the third quarter of 2013, having fallen for 11 straight quarters.

Still, this was the smallest quarterly price decline for private homes since prices started easing at the end of 2013.

"If current trends continue in the second half of the year, the market maybe heading for recovery.

However, risks still remain due to Brexit or other external events that may arise," said JLL national research director Ong Teck Hui.

Private homes in the core central region (CCR) continued to outperform those in the suburbs, rising 0.2 per cent, the second straight quarter of increase.

This was supported by good sales at OUE Twin Peaks, which sold about 160 units after introducing a deferred payment scheme.

Median prices of caveated transactions at the project are $2,588 per sq ft (psf).

Ardmore Three was another CCR project which did well, with 34 units sold in the quarter at a median price of $3,179 psf according to caveats.

However, an industry watcher noted that discounts offered at these projects were not captured in caveats.

As the project no longer comes under Housing Developers Rules, the developer does not have to disclose the extent of the discount.

Effective prices at Ardmore Three are said to be about $2,700 psf, after a 15 per cent discount and 15 per cent additional buyers' stamp duty rebate, for example.

Still, with more developers going for creative schemes to sell completed projects, volumes could be sustained, said Mr Dominic Lee, Prop- Nex Realty's branch district director specialising in luxury properties.

CapitaLand has joined in, with a deferred payment scheme recently offered at d'Leedon and The Interlace, he noted. Both projects are said to have sold about 100 units. "With that in mind, there could be some support for prices," he added.

Private apartment prices in the rest of central region (RCR) rose 0.3 per cent in the quarter after being unchanged in the first.

The increase was probably due to the relaunch of The Poiz Residences and new launches of Sturdee Residences and Stars of Kovan during the period.

A total of 1,493 private apartments in the RCR were sold in the second quarter at a median price of $1,445 psf, up from 691 units at a median price of $1,367 psf in the first quarter, according to caveats.

But private apartment prices in the outside central region or suburbs continued to slide, falling an estimated 0.7 per cent after sliding 1.3 per cent in the first quarter.

Even so, the market may be slowly pulling itself out of its descent, said Savills Singapore research head Alan Cheong.

The average length of a property price down- cycle since 1975 has been about 8.4 quarters - making this downturn longer than average, he noted.

HDB resale prices should stay flat as the Government maintains measures such as the mortgage servicing ratio cap of 30 per cent, said PropNex Realty chief executive Mohd Ismail Gafoor.

Increased Build-To-Order flat supply - the HDB will launch 18,000 new BTO flats this year, up from 15,000 last year - will also put pressure on prices, he added.

wrennie@sph.com.sg


This article was first published on July 2, 2016.
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