RESALE prices of private condominiums and apartments remained flat in May, compared to April.
Notably, prices in Core Central Region fell by 1.2 per cent, but this was offset by both the city fringe and suburbs where prices rose 0.8 per cent and 0.3 per cent respectively, SRX Property data show.
The Business Times had reported earlier that the subdued luxury condo market here has seen well-heeled buyers scooping up some high-end condo units this year, because they find the valuations very compelling.
Confirming this trend is the median transaction over X-value (TOX), which showed that the transactions in District 9 (Orchard, Cairnhill, River Valley) were negative S$20,000. This means that majority of the buyers in this district had bought units averaging S$20,000 below the market value estimated by SRX.
SRX likens the TOX to the previously used cash-over-valuation (COV), except that the market value is now computer-generated by SRX.
Both Districts 9 and 15 (Katong, Joo Chiat, Amber) reported the most negative median TOX.
On the whole, ERA Realty key executive officer Eugene Lim noted little price movement from December last year, an indication that prices may have flattened out.
"A plausible reason for the marginal decrease in prices from December to May could be the difficulty some landlords face in securing tenants. With a tight foreign labour policy, changes in the property tax scheme and monthly mortgage payments, home owners who are unable to rent out their vacant houses would find that selling off the property quickly would be a better alternative than leaving it empty.
"Therefore, this has put some downward pressure on resale prices as these owners would be more willing to let go of their property at slightly lower prices," he said.
According to the SRX Non-landed Private Residential Price Index, prices have fallen 2.8 per cent year on year from May 2014, and were down 6.4 per cent from the peak in January 2014.
The price change in April has also been revised from a 0.7 per cent decrease to a nearly flat 0.1 per cent decrease.
Resale volume has improved. About 543 private residential units were resold in May, a 4.2 per cent increase compared to 521 units resold in April.
Year on year, resale volume was 33.1 per cent higher compared with 408 units resold in May 2014.
Looking ahead, consultants expect prices to continue to fall slightly this year, on the back of increasing vacancies and interest rate increases.
That said, they have also warned that thin transaction volumes from month to month are likely to make monthly price indices such as SRX's more volatile.