Government Not Rolling Back Cooling Measures Anytime Soon

SINGAPORE — In what analysts described as a sign that bargain hunters are on the prowl, the number of non-landed private residential units sold in the resale market last month went up by 9.8 per cent from September, based on flash estimates by SRX Property released today (Nov 11).

Mr Mak said the residential property market here will continue to be weak next year, as the Government had indicated that it would not be rolling back the cooling measures anytime soon. Of these measures, the mortgage servicing ratio is applicable to executive condo such as Terrace EC and Brownstone EC.

In October, about 505 condominium and apartment units were resold, compared with 460 units in September.

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Meanwhile, prices fell 0.6 per cent over the same period. Year-on-year, resale volume was flat while prices have fallen by 2.6 per cent.

Last month’s median Transaction-Over-X-Value (T-O-X), which measures how much a buyer is overpaying or underpaying SRX’s estimated market value, was down S$3,000. For areas with more than 10 resale transactions, District 15 (Katong, Joo Chiat and Amber Road) posted the highest median T-O-X at S$20,000. District 14 (Geyang and Eunos) was at the other end of the spectrum, posting a negative T-O-X of S$30,000.

On the increase in transaction volume, ERA key executive officer Eugene Lim said: “Increasingly, we have observed that a greater proportion of buyers are turning to the resale market when looking to purchase a home for owner-occupation. Their reasons for doing so include lower prices and higher bargaining power, among others.”

Mr Lim also noted the appeal of resale units, which are larger than the new ones launched by developers.

SRX data showed that a total of 4,987 units have changed hands so far this year, said Mr Lim.

He said he expects the figure to reach 6,000 for the entire year. Last year, 4,860 resale units were sold in total.

Mr Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants, disagreed with SRX’s estimates on last month’s resale volume.

“Based on the sample of transactions received by SRX, the resale transaction volume has been declining from August to October,” he said.

“However, SRX estimates that there are 505 resale transactions nationwide in October 2015, which is 6 per cent above the 12-month average of 476.5 resale transactions per month.”

“At the same time, as the real estate market grapple with a slowdown in the local and regional economies as well as the challenges posed by interest rate hikes, property prices, rentals and demand would soften further,” he said.

While Mr Lim predicts overall prices to fall by about 2.5 per cent this year compared to last year, Mr Mak expects a sharper decline of between 3.8 per cent and 4.5 per cent.

Mr Mak added: “If the Government does not change the existing housing measures significantly, the price index could fall by another 3 per cent to 5 per cent year-on-year next year.”