Straits Times: Wed, Aug 29
RESALE home prices last month fell across the board, with the exception of shoebox apartments, with prices rising slightly.
One factor was that only a limited number of these tiny homes has been completed so far, according to market experts.
The overall Singapore Residential Price Index (SRPI) flash figures out yesterday - tracking a basket of completed non-landed projects - showed resale prices falling 1.1 per cent.
This is a reversal of the 0.1 per cent gain in the month before.
The non-central home segment suffered the biggest slide as prices fell 1.3 per cent last month compared with the month before. Central home prices recorded a smaller dip of 1 per cent.
Small "shoebox" apartments of 506 sq ft and less, however, bucked the trend with a 1.1 per cent rise in prices after a 0.9 per cent fall in June.
Experts offered various reasons for the trends seen in the SRPI, which is compiled by the National University of Singapore.
Mr Nicholas Mak, SLP International's head of research, noted that this is the first decline in overall resale prices in the past five months. Prices previously slid 1.6 per cent in February before rebounding in March.
But he said it is too early to tell if last month's figures mark a trend of falling prices.
"It is hard to say whether prices will weaken in the third quarter. Typically, we need to see at least two to three months of falling prices before calling a trend.
"But this is the nature on monthly indices, which are usually more choppy and volatile," he added. Mr Mak said that assuming there is no major economic decline, home prices are likely to remain stable this year with a 3 to 4 per cent increase.
R'ST Research director Ong Kah Seng added that the overall fall in resale prices last month indicated that the "consistent rise and exuberance in the secondary market" from March to May is increasingly facing buyer resistance.
Experts add that suburban resale demand, and hence, prices, might also have taken a hit from the resurgence of interest in the new sale market siphoning away resale buying interest.
Major new suburban launches last month include Parc Centros in Punggol and Parc Olympia in the Upper Changi area. Both enjoyed healthy sales.
Shoebox units, however, enjoyed higher prices as the stock of completed small units is still limited and the completed supply will be ramped up only from the end of this year, Mr Ong said. "So the (monthly) pricing is still very volatile due to the small basket of completed units and there will be months where buyers' interest for such properties is more evident, leaving the rest of the months reflecting a weakened price."
Mr Ong expects the overall price trend in the remaining months of the year to be "flattish" due to the festive season and the typically quieter buying activity at the end of the year.
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