Home sales volume down, but not the prices

Home sales volume down, but not the prices
PHOTO: Home sales volume down, but not the prices

SINGAPORE - It's official - the private home sales volume is down.

And this decline has been happening since March, according to Singapore Real Estate Exchange (SRX).

But many sellers still refuse to budge, said Mr Cheah Kian Choong, property director at I-Realty.

"In January, they were still optimistic (about prices). They didn't think that prices would go down, but they are slowly becoming receptive to cut their losses."

While the June figures show that resale prices have risen by 1.8 per cent for non-landed residential properties compared to last year, things are not as rosy as they seem.

Last month, there was a 21 per cent drop in transactions of non-landed properties from May.

Compared to a year ago, it is a 38 per cent decline.

For HDB, in June, there was a 9 per cent drop in transactions from the month before. Compared to a year ago, it is a 32 per cent decline.

Now, listings stay longer on the market.

Property agent Charlotte Tan said : "In general, the average wait for a sale is about four to six months compared to a maximum of two months a year ago.

"We hardly get any calls nowadays."

The reason?

"The buyers are waiting for the price to fall, but the sellers are refusing to lower their price," she said.

So why is the price index still up?

It's the flood of new launches, especially in the suburbs, say market watchers.

There were about 17 new launches with 3,773 units in the Outside Centre Region (OCR) in the second quarter, said Mr Nicholas Mak, head of research and consultancy at SLP International.

Real estate consultancy CBRE notes that the higher price points of some projects have led to an increase in the price index.

"This is largely a function of the number of projects with good connectivity that were released by developers in recent months," CBRE said in an e-mail to The New Paper.

"These include Jade Residences, Midtown Residences and Jewel @ Buangkok," said CBRE.

These projects are at Upper Serangoon, Hougang and Buangkok respectively.

Perks

Upgraders who do not need a place urgently will find new launches more attractive, with the perks that developers offer, said Mr Eric Tan, chief executive officer of real estate appraisal company GSK Global.

"Looking for a place is tough. You have to go to a few places to search.

With a new launch, you just have to go to one place."

Mr Mak projects that for the rest of the year, the private home index will rise by a marginal 0.5 per cent to 4 per cent year-on-year.

The bigger gain is likely to occur in the OCR, with a 5 per cent to 9 per cent year-on-year rise.

CBRE added: "The latest credit tightening measures are expected to cause a dent on volume in the coming months as buyers will hold off decision-making.

"However, demand for executive condominiums and private residential projects at entry levels will remain resilient."

Looking forward, however, Mr Cheah is excited even though he expects resale prices to go down.

"I'm not optimistic in term of prices, but I'm optimistic in terms of activity with sellers and buyers when prices finally go down. It doesn't make sense that prices keep going up.

"It's a cycle, what goes up will go down," said Mr Cheah.

Flats stay longer on resale market

Here are some reasons why a property stays on the resale market for a longer time:

Price

Some sellers are unwilling to lower their prices, despite the signs that the market is slowing down, said Mr Cheah Kian Choong, property director at I-Realty.

"I have a seller who expected $1.5 million for a private property, but the buyer is offering $1.2 million.

"I told the seller that if he doesn't sell now, it could go down to $1 million in a few months' time."

Location

Homes that are far from the MRT are much less popular, said Mr Eric Tan, chief executive officer of real estate appraisal company GSK Global.

Supply

The flood of new developments means that older property in the same area will be less sought after, said property agent Charlotte Tan.


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