Wednesday, February 13, 2013

Prices of private resale flats rise 0.6%

Modest gain driven by demand for homes in city fringe areas amid year-end slowdown
The Straits Times - February 9, 2013

DEMAND for homes in city fringe areas helped drive prices for private resale flats up 0.6 per cent last month.

The modest overall gain reflects the usual market slowdown at the end of the year and possible effects of the new cooling measures rolled out in January.

The data from the Singapore Real Estate Exchange (SRX) yesterday shows a mixed market. Prices in the city fringe increased 2.5per cent over December to an average of $1,256 per sq ft (psf).

Suburban resale flats were up 1.1per cent to an average of $997 psf, while city centre homes fared the worst, down 2.9per cent to $1,878 psf.

While prices were mixed across the island, the volume of sales was robust. SRX figures show that 920 private units were sold on the resale market last month, a 16.7 per cent increase over the 788 sold in December and three times higher than the 309 units sold in the same period last year.

Analysts said sales towards the end of the year tend to be slower due to the holiday season slowdown, but with new home prices at record highs, bargain-hunting buyers have hit the resale market in search of better value.

Mr Eugene Lim, key executive officer for ERA, noted that transaction volumes last October and November were higher than in January.

The SRX report also found that rents for private flats rose 1.2 per cent last month from December, led by a 3.8 per cent expansion in the city fringe. Rents in that area are at an average of $4.11 psf.

City centre rents rose 0.9 per cent to an average of $4.68 psf, although suburban homes dipped 0.6 per cent to $3.18 psf.

Mr Rommel Tan, Knight Frank's director of residential leasing, expects competition among landlords for tenants to heighten this year as more properties are added to the available stock.

"We foresee that rents for older but bigger properties could soften by another 1 to 3 per cent by year-end," he said.

"The newer but smaller units command a higher rental rate, which consequently pulls up rentals on the psf basis for the overall rental market."

He added that the trend could send overall rents up "by not more than 2 per cent for 2013".

Martin Koh | 86666 944 | R020968Z
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