SINGAPORE: Resale home prices of both non-landed private residential units and HDB flats continued to climb to new highs in October and November against the third quarter 2012.
But according to data released by the Singapore Real Estate Exchange (SRX), the rental market for private homes is showing signs of softening.
As a result, overall gross rental yield dropped to a six-year historic low of 3.77 per cent in the first two months of the fourth quarter.
Meanwhile, prices of private resale homes rose to S$1,222 per square foot (psf) in the first two months of the fourth quarter, up 5.4 per cent from the previous quarter's average of S$1,159 psf.
The report found that resale prices of private homes rose across all regions, with non-landed homes in the suburban region seeing the sharpest increase at 4.5 per cent, compared to the third quarter of 2012.
This is followed by a 3.3 per cent increase in the city fringes and a 2.8 per cent increase in the core central region.
Compared with the first two months of the third quarter this year, transaction volume rose by 6 per cent to reach 2,483 resale transactions in the October to November period.
Meanwhile, the average unit monthly rent of private homes dropped by 1.0 per cent, from S$3.88 psf in the third quarter to S$3.84 in the first two months of forth quarter.
Leading the drop is non-landed homes in the city fringe where prices fell by 2.5 per cent to S$3.91 after rising for the first three consecutive quarters in this year.
The other regions remained relatively stable compared to the previous quarter.
Meanwhile, the report included for the first time data about the sales of small private apartments, commonly known as shoebox units in Singapore.
Year-to-date, just 198 shoebox units changed hands in the resale market.
But the report said there was strong demand for rentals of shoebox units, with 1,328 rental contracts signed this year. This represents 6.7 times more rentals than resales for shoebox units year-to-date. In contrast, the average is 2.4 times more rentals than resales for other types of units.
As a result, shoebox units continue to draw higher rental offers in the fourth quarter.
In the HDB resale market, SRX said overall cash-over-valuation rose to S$34,000 in the first two months into forth quarter. This is S$2,000 shy of the five-year historical high of S$36,000 attained in the third quarter of 2011 since tracking began in 2007.
On a month-to-month basis, overall COV increased from S$33,000 in October to S$35,000 in November.
This has contributed to a 1.1 increase in median prices of HDB flats to a new high of S$455,000, compared to the third quarter.
"With effect from the middle of this year till November, we have seen a COV increase of S$7,000. That's quite hefty in such a short period of time. I think there is every reason for the government to introduce potential measures to keep resale prices in check and try to calm the price of COVs," said Donald Han, a special advisor at HSR Property Group.
Overall HDB median rents remained unchanged at S$2,400.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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