Private home resale prices and rents drop

PHOTO: Private home resale prices and rents drop

Resale prices and rents for non-landed private homes softened last month, as sellers and landlords lowered their prices in the face of a slowdown in demand.

The resale prices of non-landed private homes slid 1.6 per cent in September from August, said the Singapore Real Estate Exchange (SRX) in a report on Thursday. Private home rentals, meanwhile, slipped 1.1per cent month-on-month - the biggest monthly rental price drop so far this year.

Consultants said both markets are likely to remain weak in the coming months, partly due to an increasing supply of new homes.

The dip in overall private home resale prices last month was a reversal of the revised 0.5 per cent month-on-month gain in August. The flash estimate for that month had been a 1.5 per cent increase.

The dip came mainly on the back of a 3.5 per cent drop in the city fringe last month from the preceding month. In suburban regions, resale prices fell by 1.5 per cent from August to September.

But these declines were partly offset by a 2.5per cent month-on-month rebound in the city centre.

An estimated 462 non-landed homes were resold last month, a little more than August's 447.

Even so, the total third-quarter private home resale volume, at 1,478 units, was 57 per cent lower than in the corresponding period last year.

ERA key executive officer Eugene Lim said sellers may be more willing to negotiate with buyers now, given the lull in the resale market.

"Buyers are expecting sellers to price their homes reasonably due to the cooling measures and increased supply," he said.

The private home rental market has also softened as more homes go on the market and cuts in the hiring of foreign manpower shrink the tenant pool.

The city centre saw the biggest drop in rents last month, with a 1.9 per cent decline from August. City fringe rents fell 0.7 per cent, while suburban rents slid 0.5 per cent.

The islandwide drop in rents has reduced private home rental yields. Gross rental yields ranged from 3.1 per cent to 3.9 per cent in the third quarter of this year, down from the range of 3.3per cent to 4.2 per cent in the corresponding period last year, the SRX said on Thursday.

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