29-02-2012, 08:01 AM
The Straits Times
Feb 29, 2012
Resale home prices fall for 2nd straight month
Values drop most in luxury, small-unit segments; non-central homes buck the trend
By Cheryl Lim
PRICES of resale homes have fallen for the second straight month, with values dropping most in the luxury and small- unit segments.
Overall prices last month for these non-landed homes fell 0.4 per cent, after December's 1 per cent drop.
Prices of non-central homes bucked the trend, rising 1 per cent. High-end property in the central area saw prices dipping 1.9 per cent while prices of units under 506 sq ft were down 1 per cent.
The data was compiled by the National University of Singapore's Institute of Real Estate Studies for its monthly Singapore Residential Price Index.
Analysts said small units and high-end homes typically attract a larger following of investors, a factor which could account for the slump in their resale prices.
This group of buyers has been hit hard by the recent property cooling measures, said Mr Nicholas Mak, head of research at SLP International.
'We assume that homes in the non- central areas are typically bought by owner occupiers. That's probably why we see more robust resale prices for this segment of the resale market.
'When these owner occupiers decide on buying a piece of property, they might not be able to wait it out for better market conditions.'
The success of new suburban projects may have had some part in the rise of non-central resale prices, said Mr Ku Swee Yong, chief executive of International Property Advisor.
'Suburban projects like The Hillier and Watertown have achieved record prices for the sales of their units. These record highs have helped pull up the values of the surrounding properties in the neighbourhood,' he said.
The slump in high-end resale prices in the central area is in line with earlier analyst expectations of a slowdown in the luxury home segment.
This segment, heavily dependent on foreign buyer demand, has been hit hard by the recently announced additional buyer's stamp duty.
'The (extra duty) may deter foreigners who are not in a hurry to purchase a home here to put their decision on hold,' said Mr Ong Kah Seng, director at R'ST Research.
'The fear of property re-pricing in response to sales lethargy may mean locals are deferring their decisions to purchase such homes.'
Prices of luxury homes might soften but some analysts feel they might stabilise within the third quarter, said Mr Mak. 'It might come to a point where resale prices of these homes drop to a certain level, and when that happens, some investors will jump back into the market to snag a bargain.'
The drop in small-unit prices can be attributed to an increase in the number of new projects.
Mr Ong said buyers would be less inclined to buy from the resale market, given the wider selection on the primary market.
He added that a new property usually comes with staggered payment plans, compared to a resale property which would require an immediate financial outlay.
January's figures also reflect a change in the basket of properties used to calculate the price index; it now reflects the effect of smaller units on resale prices.
The new batch includes an additional 113 projects that have been completed since October 2001. About 100 properties that were completed from October 1998 were removed from the previous list.
The changes are designed to better reflect the changes in the completed stock of private non-landed properties.
Aside from the addition of newer properties, the batch also includes a higher proportion of small units, which make up 10 per cent of the measured properties, twice the proportion used to compile December's index.
The projects with small units include The Clift, One-North Residences, Citylights, Soleil@Sinaran and The Raintree.
cherlim@sph.com.sg
Feb 29, 2012
Resale home prices fall for 2nd straight month
Values drop most in luxury, small-unit segments; non-central homes buck the trend
By Cheryl Lim
PRICES of resale homes have fallen for the second straight month, with values dropping most in the luxury and small- unit segments.
Overall prices last month for these non-landed homes fell 0.4 per cent, after December's 1 per cent drop.
Prices of non-central homes bucked the trend, rising 1 per cent. High-end property in the central area saw prices dipping 1.9 per cent while prices of units under 506 sq ft were down 1 per cent.
The data was compiled by the National University of Singapore's Institute of Real Estate Studies for its monthly Singapore Residential Price Index.
Analysts said small units and high-end homes typically attract a larger following of investors, a factor which could account for the slump in their resale prices.
This group of buyers has been hit hard by the recent property cooling measures, said Mr Nicholas Mak, head of research at SLP International.
'We assume that homes in the non- central areas are typically bought by owner occupiers. That's probably why we see more robust resale prices for this segment of the resale market.
'When these owner occupiers decide on buying a piece of property, they might not be able to wait it out for better market conditions.'
The success of new suburban projects may have had some part in the rise of non-central resale prices, said Mr Ku Swee Yong, chief executive of International Property Advisor.
'Suburban projects like The Hillier and Watertown have achieved record prices for the sales of their units. These record highs have helped pull up the values of the surrounding properties in the neighbourhood,' he said.
The slump in high-end resale prices in the central area is in line with earlier analyst expectations of a slowdown in the luxury home segment.
This segment, heavily dependent on foreign buyer demand, has been hit hard by the recently announced additional buyer's stamp duty.
'The (extra duty) may deter foreigners who are not in a hurry to purchase a home here to put their decision on hold,' said Mr Ong Kah Seng, director at R'ST Research.
'The fear of property re-pricing in response to sales lethargy may mean locals are deferring their decisions to purchase such homes.'
Prices of luxury homes might soften but some analysts feel they might stabilise within the third quarter, said Mr Mak. 'It might come to a point where resale prices of these homes drop to a certain level, and when that happens, some investors will jump back into the market to snag a bargain.'
The drop in small-unit prices can be attributed to an increase in the number of new projects.
Mr Ong said buyers would be less inclined to buy from the resale market, given the wider selection on the primary market.
He added that a new property usually comes with staggered payment plans, compared to a resale property which would require an immediate financial outlay.
January's figures also reflect a change in the basket of properties used to calculate the price index; it now reflects the effect of smaller units on resale prices.
The new batch includes an additional 113 projects that have been completed since October 2001. About 100 properties that were completed from October 1998 were removed from the previous list.
The changes are designed to better reflect the changes in the completed stock of private non-landed properties.
Aside from the addition of newer properties, the batch also includes a higher proportion of small units, which make up 10 per cent of the measured properties, twice the proportion used to compile December's index.
The projects with small units include The Clift, One-North Residences, Citylights, Soleil@Sinaran and The Raintree.
cherlim@sph.com.sg