Prices of Housing Board flats fell for the sixth consecutive month in July and to their lowest level since February 2012, the latest data from the Singapore Real Estate Exchange showed.
Though slightly more flats were sold, experts attributed this to the return of buyers and sellers after the traditionally quiet June holiday season.
The resale price index fell 0.9 per cent from June, bringing HDB resale flat prices down 4 per cent since the start of the year.
Weakening prices hit most of the market, with three-, four- and five-room flat prices dipping 1.0 per cent, 1.8 per cent and 0.4 per cent respectively. Only executive flats were spared, with prices up by about 0.1 per cent.
In all, the index is 6.7 per cent lower than July last year. Analysts said the slide was expected, due to the continued effects of cooling measures such as home loan curbs and a steady supply of new Build-To-Order flats.
“Demand and prices are expected to stabilise or slightly pick up in around the second half of 2014, due to buyers finding resale flat prices increasingly reasonable,” said R’ST Research director Ong Kah Seng.
Already, last month’s resale volumes rose slightly, but experts remained cautious about a turnaround. Last month, 1,341 flats were sold, up from 1,315 in June. But this was still 10.2 per cent lower than the 1,494 units that changed hands in July last year.
The recovery may be thanks to buyers and sellers returning to the market after the school holidays and World Cup in June, said SLP International Property Consultants head of research Nicholas Mak. He said the rise in volume is not likely to continue this month, as the Hungry Ghost period is seen as an inauspicious time for buying a house.
But in the longer term, buyers may be lured back into the market by low prices, said experts.
Mr Ong expects prices to fall by no more than 7 per cent for the full year. Other estimates range from 4 per cent to 8 per cent.
Property agents said some buyers have returned but not in large numbers. Said Dennis Wee Realty agent Judy Tay: “Some are those who have wanted to buy for a long time, but are coming in now that prices are low.”
But with prices low and buyers still scarce, some prospective sellers might choose to rent out their units instead, said experts.
An estimated 1,601 HDB flats were rented last month, up from June’s 1,574 units but flat compared with a year before. Rents were down, with the rental index falling 1.5 per cent to a three-year low. The median monthly rent was $2,300.
With foreign labour curbs hitting demand, and supply rising as upgraders move into newly completed units, rents will likely stay low, OrangeTee head of research Christine Li said.
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