Resale condo prices ease again in Jan: SRX flash estimates

THE resale market for non-landed private homes continued to languish in January, SRX Property's latest flash estimates released on Tuesday show.

Its overall resale price index for non-landed private homes continued to slip month on month in January. The overall median transaction over X-value (TOX) remained at negative S$10,000. Resale volumes also hovered around the 300-plus level for the third consecutive month.

Market watchers expect resale volumes to pick up after February.

SRX Property's overall resale price index for non-landed homes dipped 0.2 per cent month on month in January. Year on year, the index eased 6.5 per cent.

ERA Real Estate key executive officer Eugene Lim said: "The price decline was expected due to flat volumes. In the absence of any tweaks to the existing slew of cooling measures and loan curbs, we can expect price decline to continue for 2015.

"On the whole, non-landed private home prices (covering both primary and secondary markets) may decline by 5-8 per cent for the whole year while the Core Central Region may see higher price declines of 8-10 per cent."

The flash estimates showed resale prices of non-landed private homes in Core Central Region and Outside Central Region posting 1.7 per cent and 1.1 per cent month-on-month declines respectively. However, prices in city-fringe locations, or Rest of Central Region, rose 1.5 per cent.

R'ST Research director Ong Kah Seng forecasts resale prices of non-landed private homes to ease by up to 7 per cent this year, assuming none of the cooling measures are removed in the second half. "Any scaleback of cooling measures in H2 2015 would not result in a rapid rise in resale private home prices. Investors understand that there is a substantial amount of private home completions that will intensify competition for tenants."

Based on Urban Redevelopment Authority (URA) data, 19,941 private homes (both landed and non-landed) received Temporary Occupation Permit last year, up 51.6 per cent from 13,150 units in 2013.

The vacancy rate for non-landed private homes climbed to 9.1 per cent as at end-Q4 2014 from 7.1 per cent a year earlier.

Private home completions this year are forecast to rise to 21,359 units, followed by a further 20,919 units in 2016 - based on information provided by developers to the URA.

According to SRX Property data, an estimated 370 non-landed private homes changed hands in the resale market last month, reflecting a nearly 2 per cent increase from the 363 units in December. The January resale volume was 25.9 per cent higher than the 294 units in the same period last year. However, the resale volume is down 82 per cent from its peak of 2,050 units in April 2010.

Nicholas Mak, executive director of SLP International, predicts that total resale volumes for private homes (both landed and non-landed) could stage a modest recovery this year to around 5,200-7,000 units - up from 4,860 units last year. "Somebargain-hunting investors and home buyers could be attracted to the secondary property market as the resale property prices continue to remain soft. . . The real recovery will occur only after a major relaxation of the existing property curbs."

ERA's Mr Lim observed that generally, "the more serious sellers are more negotiable and prepared to consider reasonable offers, especially as interest rates on home mortgages and vacancies are on the increase".

"However, most sellers are not under tremendous pressure . . . and low-balling buyers are not likely to make any headway with ridiculously low offers," he added.

Commenting on SRX Property's overall median TOX - which measures how much people are overpaying or underpaying against the computer-generated estimated market value or the so-called X-value - remaining unchanged at negative S$10,000 in January, Mr Lim said: "This reading shows that buyers continue to be conservative in their bids in view of the muted market outlook."

SRX Property said that among districts with at least 10 resale transactions last month, District 11 (which includes Watten Estate, Novena and Thomson) had the highest median TOX of positive S$60,000, followed by District 12 (which includes Balestier, Toa Payoh and Serangoon), at positive S$6,000.

Using the same criteria, the lowest median TOX was in District 23 (including Bukit Panjang and Choa Chu Kang) with TOX of negative S$31,000, followed by District 15 (which includes Katong, Joo Chiat and Amber Road), at negative S$20,000 and District 18 (Tampines, Pasir Ris), with also negative S$20,000.

"Non-landed private residential prices continue to face downward pressure and negative market sentiment," SRX Property said.