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Private condo resale prices flat in July: SRX
THE private property resale market continued to look weak, data from SRX Property released on Thursday showed.
Resale prices of private condominiums and apartments inched up 0.3 per cent in July 2015 compared to June. Notwithstanding the slight increase, SRX Property described the market as being "as flat as a board".
The increase was mainly due to higher prices in the city and suburban areas which saw prices rise 1.7 per cent and one per cent respectively. Prices in the city fringe fell by 2.2 per cent, however.
Property consultants read this as resale prices stabilising, as prices start to better match buyers' affordability.
"In view of the numerous cooling measures still in place, it would seem that prices have reached an equilibrium level and we are unlikely to see large changes in price levels," said ERA's key executive officer Eugene Lim.
He added that it is too early to say whether the prices will continue increasing. "Going forward, provided there are no economic shocks, we do not expect prices to move much, as the government has made it rather clear that the cooling measures will not be removed any time soon."
R'ST Research director Ong Kah Seng agreed that any notable price recovery is unlikely in the near term, as the Total Debt Servicing Ratio framework continues to cap property loan limits, and buyers' caution is heightened amid ample new completions and choices.
Year on year, prices in July dropped 0.9 per cent. They were also down 6.5 per cent from the recent peak in January 2014.
The price change in June has also been revised from a 0.4 per cent increase to a milder 0.1 per cent increase.
In terms of transactions, resale volume fell 10.4 per cent to a paltry 515 units resold in July, compared to 575 units resold in June.
Mr Lim from ERA said that this could be due to "the action swinging over to the new home sales market", thus stealing some demand away from the resale market.
For instance, about 78 per cent of units (nearly 1,100 of the 1,399 units available) in High Park Residences, a massive condo project in Seng Kang, were sold in its first weekend of sales in July.
For the whole year, Mr Lim expects overall prices to fall 5-6 per cent due to increasing vacancies and interest rate hikes.
Resale volume could hit 6,000 units for the whole of 2015, about 20 per cent more than last year, as buyers are drawn to the stabilising resale property prices.