Though still on the incline, overall non-landed home resale prices grew just marginally in July, with a large contribution from a much stronger price hike in the ‘shoebox’ unit segment. Even so, compared to June’s 2.4%, prices of these 500-sq-ft-or-less homes rose at a rather subdued pace of 1.4%.
(The
resale market slowdown could be due to uncertain economic conditions in the US
and Europe)
Singapore Residential Price Index (SRPI), which monitors non-landed completed projects and their transactions, estimated an overall price growth of a mere 0.2%, much lower than June’s 0.7% mark.
Singapore and South East Asia head of research for CB Richard Ellis Ms Petra Blazkova attributed the drop in interest and demand for small homes to uncertainties caused by the economic crises in both the United States and Europe. She explained, “In the long term, we will continue to see more interest, possibly until 2012. The supply of such homes remains steady and smaller units are seen as a more affordable class of property for those who are interested in putting their money in property.”
Echoing her sentiment is Knight Frank’s research head Mr Png Poh Soon, who told The Straits Times that property buyers may also be banking on the long-term potential of these homes, especially if they are found in well sought-after locations like the upcoming commercial hub in Paya Lebar.
Based on location, suburban home prices seem to be on a stable growth at 1.2%, unchanged from June. (Central-district home prices plummeted 1.3%.) Despite the thriving buyer interest in suburban resale properties, observers expect the recent revisions to income limits for public housing to significantly bring down demand, because the higher income ceiling would allow more home-seekers to buy HDB flats.
It is expected that the next few months will see resale home prices reflect this shift in buyer preference towards public housing, where they would have otherwise purchased private property. As such, analysts say the true effects of this policy change will be felt when newer public housing projects are released. In this sense, the most recent 0.2% growth in resale prices could foreshadow months to come, and is a good indication that the market is finally finding equilibrium despite external environment uncertainties clouding buyer sentiment.
Meanwhile, another group of homebuyers are taking advantage of this dip in demand and turning it into an investment opportunity. Said Png, “[This] group is made up of people who still believe that with interest rates remaining low, property is a less volatile investment than putting money into the stock market. Even if prices drop, these people will hold on and rent their apartments out.”
Head of research at Jones Lang LaSalle South-East Asia Dr Chua Yang Liang anticipates slower price growths due to doubts over the current global economic conditions. Some fluctuations can be expected from the resale market, but Dr Chua said that it is likely prices for the segment will stabilise throughout the remaining months of 2011. He added that prices for both new and resale property might appreciate between 1.5% and 2% in this period, and ultimately increase by some 7% for the entire 2011.
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Related Categories: Issues & Challenges, Private Residential
Tags: HDB, HDB flats, Non-landed Resale Market, Non-landed Resale Prices, private housing prices in Singapore, private housing trends in Singapore, public housing trends in Singapore, shoebox apartment, Shoebox Units, Singapore property trends, Singapore Resale Market Prices, Singapore Resale Market Trends
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anonymous said...
too bad... it is unusual increase 7 percent per year......
September 04, 2011 8:56:00 PM
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