Prices of resale condos slip 1.4% in June: SRX

[SINGAPORE] Resale prices of private condos dipped further last month to a low since December 2012, despite an increase in resale volumes.

This could be due to more buyers moving into the resale market as owners relent to lower prices to match the expectations of buyers, property consultants say.

Transaction data from Singapore Real Estate Exchange (SRX) shows that prices fell 1.4 per cent from May, dragged by declines across all regions.

But the number of resale transactions increased by 7.9 per cent month-on-month to 452 in June. This is, however, 23.8 per cent lower than the number of resale transactions inked in June last year.

"June's increase in resale deals cannot be construed as buoyant sales activity as total monthly resale deals is still fairly limited. Some deals moved in June as owners finally relented to lower prices offered by buyers, after the property was up for sale prior to June for a while but could not find a buyer who is willing to pay near the asking price," said Ong Kah Seng, director at R'ST Research.

The resale market was also quiet due to the June holidays and the World Cup period, he added.

The Rest of Central Region (RCR) marked the biggest price decline of 3.2 per cent, followed by 1.7 per cent in Core Central Region (CCR) and 0.3 per cent in Outside Central Region (OCR).

ERA Realty key executive officer Eugene Lim noted that the price declines in RCR and CCR, where homes fall in a higher price band, steered the prices down.

Resale prices in the CCR are also affected by loan curbs, ample unsold developer stock, additional buyers stamp duty and weak leasing demand.

But he reckoned that as prices stabilise, more buyers may be moving back to the resale market.

In the rental market, condo owners were more willing to lower their asking rents to secure tenants.

According to SRX, overall rental prices in June dipped 0.8 per cent from May, and fell 6.5 per cent from a peak in January last year. This is based on an estimated 3,151 units rented in June.

This estimated number of rental transactions is a 2.2 per cent increase from the 3,084 rental contracts inked in May, and 18.6 per cent higher than the 2,657 rental contracts signed in June last year.

Mr Lim noted that the completion of private condos will rise from 13,150 units last year to an estimated 17,138 units this year. This is expected to rise further to 21,738 units in 2015 and 26,252 units in 2016.

More condo units entering the resale market and the tightening of foreign manpower will probably keep rents depressed going forward, he said.