There has been talk about private non-landed home prices being affected by the onslaught of new completed homes flooding the market this year. Could the supply-glut effect be already taking hold of the market as resale completed condo prices fell 1 per cent in March?
February and January were positive months for the private resale property market as prices rose 0.5 and 0.2 per cent respectively. Though the fall in March may seem a bit of a letdown, an overall dip was registered in all market segments. The largest decrement was for the non-central regions, where a 1.4 per cent fall was recorded.
Property analysts are expecting a 3 per cent fall in private home prices this year as the supply of completed homes continue to be met by competition from new launches and competitive pricing from developer-sold projects. Resellers of completed or older resale condominium units may face increase competition from developers who are now pricing newly-launched units are more palatable pricing. Buyers have also become more selective and are more likely to pay only for location. The total debt servicing ratio (TDSR) framework also limits the amount they can loan, thus putting a bit of a dampener on investment- or upgrading-based property purchases.
As the middle of the year approaches quickly, the next quarter will likely show the market response more clearly as more new launches are planned. How will the consumers react to the competition for their attention. Will sales volume increase significantly or will prices fall in the heat of battle?