Cooling measures and the Total Debt Servicing Ratio framework continued to send non-landed private home resale volume on a controlled descent to a level not seen since December 2008 during the global financial crisis.
Flash figures released yesterday by the Singapore Real Estate Exchange (SRX) showed resale transactions down 18.5 per cent month-on-month to an estimated 242 transactions last month.
The drop was a more pronounced 22.2 per cent on a year-on-year basis, from 311 resale deals closed in February 2013.
Meanwhile, resale prices reversed consecutive price gains in December and January to dip 2 per cent, which consultants say shows a “natural” pullback from “unsustainable” price increases in the previous two months.
Prices in the CCR fell 3.9 per cent month-on-month in February, after climbing 1.8 per cent in January, while those in the OCR fell 1.8 per cent, after climbing 2.6 per cent the month prior.
Sam Baker, co-founder and CEO of SRX also noted that for the last 15 months, the price indices for non-landed resale homes have been bouncing between the 170 and 180 bands.
“Prices have been unable to break through the 180 ceiling, yet at the same time, prices are resisting the pressure from the cooling measures to fall below the 170 support level,” he said.
Consultants BT spoke to expect prices to drop by 4 to 10 per cent in the private resale market for the whole of 2014 amid weak demand, with the greatest signs of distress in the CCR, which may see prices fall by 10 to 12 per cent.
This is due to companies’ cutting back on expats’ housing allowance, as well as the deterrence of the hefty additional stamp duty buyers have to pay, since most already own a residential property.
Leasing activity also stayed weak in February, with rental prices falling one per cent islandwide despite a temporary rebound in January.
All three regions saw rental prices decline in February. Rents in the RCR fell the most, down 1.9 per cent, while rents in the CCR and OCR fell by 0.6 per cent and 1.3 per cent, respectively.
Some 2,442 rental contracts were signed in February, 6.6 per cent fewer than in January.
Source: Business Times – 11 March 2014