A CONTINUED fall in resale prices of private non-landed homes failed to lift transaction volumes in April, as buyers' attention likely shifted to recent new property launches, consultants say.
SRX Property flash estimates show prices falling 0.7 per cent last month compared to March; but data compiled by the exchange estimated that 440 resale units were sold last month, 2.7 per cent below the 452 units sold in March.
"The slight drop in resale volume was quite possibly due to more new launches by developers like North Park Residences," said ERA Realty key executive officer Eugene Lim. "The step-up of new launches possibly diverted some attention away from the resale market."
Two new projects launched by developers last month - North Park Residences in Yishun and Botanique at Bartley - were relatively well-received. Frasers Centrepoint Limited sold 515 units at 920-unit North Park Residences as at May 7 while UOL Group sold more than 300 units at 797-unit Botanique at Bartley.
But there were still more resale transactions in the first four months this year compared to the same period last year, according to SRX Property data, which comprise caveat and non-caveat information: 1,581 units this year from 1,332 units in 2014.
Mr Lim said that this could be a signal that more buyers are returning to the market as prices stabilise. It may also reflect increased interest from owner-occupiers, since resale units are more popular for owner occupation.
Going by region, resale prices of non-landed private homes fell 0.1 per cent and 1.5 per cent respectively in the Core Central Region and Outside Central Region, while resale prices of city-fringe homes in the Rest of Central Region bucked the trend with a 0.4 per cent rise.
PropNex Realty chief executive Ismail Gafoor said that the steep drop in the OCR could be attributed to greater supply of new launches and resale properties there compared to other regions. Compared to a year ago, resale prices of non-landed private homes dropped 4 per cent in April. Prices were 6.9 per cent below the January 2014 peak of the SRX price index.
R'ST Research director Ong Kah Seng noted that "investment phobia" and pessimism will increasingly set in among resale homebuyers given a surge in new private residential completions, tougher leasing conditions, and recent loss-making resale transactions by some owners.
"Buyers generally are opportunistic now, preferring to get a property when they can slash price substantially from the owner, but they will be sceptical about the investment potential if, indeed, the owner has to cut price to offload the property," he said.
OrangeTee manager of research and consultancy Wong Xian Yang noted that uncertainty over any tweaks to the government's cooling measures has kept buyers on the sidelines. While buyers are hesitant to commit as prices continue to slide, sellers have strong holding power given a stable economy and a tight labour market.
"The announcement of the high speed rail (HSR) location may spark some buying interest in the west. However, the effect on the overall price and volume trend would likely be limited," he said, referring to news of locating the HSR terminus at the site currently occupied by Jurong Country Club.
The median transaction over X-value, a computer-generated estimate by SRX to show how much people are buying above or below the estimated market value, moved from a negative S$10,000 in March to zero in April - suggesting a neutral level.
Mr Lim of ERA noted that this may be a good indication that prices have stabilised.
"However, as this is a monthly reading, we need to monitor the market for a few more months to be more conclusive."