Suburban condos holding up better in resale market

Condominiums in the suburbs proved the most resilient last year despite the sting of cooling measures and strict financing.

Although resale prices dipped 4.2 per cent across the board last month from a year earlier, suburban apartment prices fell by a smaller 3.5 per cent, flash estimates from SRX Property showed yesterday.

It was a better showing than resale homes in the city fringe areas, where prices slumped 7.5 per cent, and those in the city centre, which fell 6 per cent.

Suburban homes also made up the lion’s share of resale transactions last year, SRX said, accounting for more than half of the 4,668 deals.

“The cooling measures and total debt servicing ratio have been more favourable towards the mass-market segment compared with their central counterparts, as homes in the suburbs have relatively lower price quantums and are mostly supported by upgrader demand,” said Ms Christine Li, research head at property firm OrangeTee.

Resale volume last month picked up 13.1 per cent from the 328 units resold a year ago – a possible hint of a slight recovery in buying demand as the market finds its feet in the new regulatory climate, added Ms Li.

But last month’s tally was still down 81.9 per cent against the peak of 2,050 units resold in April 2010.

Prices have fallen 6.1 per cent since their recent peak in January last year.

SRX’s median TOX – a measure of whether buyers were overpaying or underpaying – slipped into negative territory last month.

Resale units were snapped up for $10,000 less than the market value of earlier comparable transactions, giving buyers the upper hand in a market suffering from waning demand.

This helped to sustain buying momentum in spite of the holiday season, as buyers picked up 371 units last month, the same number as they did in November.

“There will be opportunities in the market for properties to be transacted at the right price. There are serious buyers and investors who are able to sniff out good deals,” said Mr Mohd Ismail, chief executive of PropNex.

As a result, resale prices rebounded from a dip of 1.1 per cent in November to an increase of 0.1 per cent in December. But Mr Ismail said the increase was “insignificant” because of the thin volumes.

Resale prices of suburban homes rose 0.5 per cent last month, though prices of apartments in the city fringe areas fell 1.2 per cent, and 1.1 per cent in the city centre.

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