Straits Times: Sat, Jun 09
THE private resale home market has rebounded strongly after a weak start to the year and is on track to post its best showing in the past year, new data shows.
The resale market took a sharp dive earlier in the year in the wake of December's market cooling measures and January's Chinese New Year festivities.
This resale market rebound and the robust market for sales of new homes - with 2,487 units sold in April, the strongest in nearly three years - are causing concerns that fresh cooling measures might be on the cards.
However, with the euro zone crisis worsening, experts say more time may be needed for the situation to play out before any firm decisions are made.
Singapore Real Estate Exchange (SRX) data showed that there were 2,551 resale non-landed transactions in April and May, eclipsing the 2,117 units sold in the first three months of this year.
Average resale prices have also inched up to $1,131 per sq ft (psf), according to data from SRX, which collates and displays transactions by major property agencies, accounting for about 85 per cent of resale transactions.
This is a rebound from the average of $1,051 psf in the first three months of the year after prices softened from $1,072 psf in the fourth quarter of last year.
New sales at Sky Habitat in Bishan and Katong Regency in Paya Lebar in the second quarter - both of which set benchmark prices - have also spurred talk that the quarterly price index released next month might head north again, after dipping 0.1 per cent in the first quarter.
Experts say falling prices in certain areas might have drawn home buyers back to the resale market, which had languished compared to new home sales.
Volatility in the stock market may have led some investors to put their money in property, instead of equities and bonds.
Savills Singapore research head Alan Cheong said that since underlying sentiment is still bullish, more buyers might have turned their attention back to the resale market in search of value buys.
He reckons additional cooling moves are possible by year-end.
Ms Chua Chor Hoon, DTZ head of Asia-Pacific research, said buyers who adopted a wait-and-see stance after the introduction of the additional buyer's stamp duty are re-entering the market, encouraged by the exuberant buying sentiment in the new homes market. They are also turning to the secondary market for better value, as new launches set new benchmark prices, she added.
'Purchase sentiment in June could be affected by the school holidays, rising uncertainty over the euro zone sovereign debt crisis and the volatility of the stock market.'
Despite this, 'resale volume (in the second quarter) is likely to come close to the 3,300 units sold in the third quarter of 2011'.
The rental market, however, has recorded lower yields, SRX said. Overall yields for April and May were 4 per cent, down from 4.25 per cent in the first quarter, likely due to a subdued high-end rental market, experts say...
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Martin Koh/ Sherry Tang
Martin Koh/ Sherry Tang