This did not come as shocking. The market has indicated to the sellers specifically the developers – if you continue to raise prices or price yourself out of the market, we will continue not to buy your properties.

[quoted from The Business Times - 2 July 2008] The Urban Redevelopment Authority (URA) released estimates for the Q2 2008 price index for private residential property yesterday with prices rising just 0.4 per cent – a mere crawl compared to the 3.7 per cent increase in the previous quarter.

This was evident with Dakota Residences that lowered its price marginally from the original $1000psf to boost the speed of the sale, resulting in an average of $975psf  on the units sold. The strategy worked. The number of units that was released 2 weekends ago were all fully sold late last week. Well there are always trade-offs. It goes to show that a little sweetener or discount given will attract the buyers like bees to honey. In the months of April and May, sales of new homes more than double the figures seen earlier this year. With approximately 1200 to 1400 new homes were sold between April and May.

Properties along the fringe of the city – like Dakota Residences are popular. Even small developments at Geylang like The Sunflower were both sold out. It goes to show that such locations are popular with home buyers and investors.

[quoted from The Business Times - 2 July 2008] Colliers International director (research and advisory) Tay Huey Ying even believes that home prices have, ‘remained stubbornly resilient to the extent that they continue to post a y-o-y increase of 20.4 per cent’.

Ms Tay also added that for the first six months of the year, home prices rose by 4.2 per cent. ‘(Developer’s) current pricing strategy can be described as competitive, that is either similar to current market prices or marginally lower than competitors,’ she added.

Ms Tay believes that home prices will continue to resist ‘downward pressure’ and expects prices to hold steady or decline marginally by not more than 3 per cent in Q3 2008.

Saying that mass-market prices have generally not been ‘chased up’ or preyed upon by the ’speculative element’, Ms Tay believes this sector could be the best performing for the rest of the year.

This however needs to be put in context.

Knight Frank’s Mr Mak does point out that prime property prices have increased by 52.4 per cent over the last two years. ‘On this basis, it is not surprising that this market segment will lead the slowdown in price growth,’ he added.

Despite the poor performance in the private home for both the primary and secondary market. The HDB market is bucking the trend, and is still experiencing strong demand for new flats as well as those on resale. Demand for HDB flats could have been bolstered by the high prices of private homes in the past 3 years, so upgraders are still sticking to larger older units in mature estates.