Buyers jumped back into the local housing market as prices of both public and private homes fell for another straight quarter, figures out yesterday showed.
A raft of cooling measures has kept a tight rein on the market, but clear evidence of softer prices is drawing buyers back.
Private property prices slipped by a gentler 1 per cent in the April to June period from levels in the preceding quarter, when they dropped by 1.3 per cent. However, the number of homes sold shot up 46.4 per cent to 4,118 units from the first quarter to the second.
A similar scenario played out in the public housing market: Prices of resale flats fell 1.4 per cent in the three months to June 30 – a slight improvement over the 1.6 per cent drop in the first quarter.
But 4,389 Housing Board (HDB) flats changed hands during the quarter, up 16.1 per cent from the previous quarter.
This was the fourth straight dip in the HDB’s resale price index, which has seen a 5.3 per cent decline since the peak in the public market a year ago.
Although buying volumes are rising, analysts say that an increasing supply of completed condo units and public flats will continue to hold prices down.
R’ST Research director Ong Kah Seng said sellers of resale HDB flats can no longer demand high prices as the mortgage servicing ratio, which caps loans for public flats at 30 per cent of a borrower’s gross monthly income, limits large home loans.
As more owners take possession of newly completed HDB flats, the number of public homes on the resale market is likely to rise, said SLP International research head Nicholas Mak.
“Buyers of Build-to-Order flats are required to dispose of their existing HDB flats within six months of taking possession,” he said. And the supply will only increase as upgraders move into new private homes.
A total of 24,893 new units, including executive condominiums, are estimated to be due for completion by the end of next year, Urban Redevelopment Authority figures showed yesterday.
Prices on the private home front fell across all segments. City-centre prices declined 1.5 per cent, while city-fringe prices fell 0.4 per cent. Prices of suburban homes dropped 0.9 per cent.
Even though developers dangled competitive offers at new launches, the overall slide was led by non-landed resale units, which fell 1.3 per cent, while new condo units saw a 0.5 per cent dip.
Ms Chia Siew-Chuin, director of research and advisory at Colliers International, said: “This could indicate that the stalemate between home owners and buyers has given way to a softer stance among sellers.”
Upcoming launches such as Keppel Land’s The Highline Residences are expected to underpin sales volumes, which are likely to be around 4,000 to 6,000 for the second half, predicted Dr Tan Tee Khoon, executive director of residential services at Knight Frank. Private home prices could moderate by 5 to 6 per cent by the fourth quarter, he said.