Condo resale market joins in the slide
THE resale market for condominiums and private apartments continued to lose steam, according to figures released by the Singapore Real Estate Exchange (SRX) yesterday.
Last month, an estimated 310 units were sold, down from 341 in December last year.
Year-on-year, the decline is far more stark - with transactions down 70.2 per cent compared to January last year, where there were 1,039 resale deals.
This trend is similar to that in the Housing Board resale market where cash premiums have hit their lowest point in nearly eight years.
But as the transactions for condos tumble, resale prices remained stubborn. In fact, prices went up by 2.3 per cent last month compared to the previous month.
On the rental front, 2,348 contracts were signed last month, an increase of 8.1 per cent compared to December, but down from 2,734 in January last year.
Rentals in January saw their first increase of 1.1 per cent in the last six months.
Cooling measures, such as the Total Debt Servicing Ratio (TDSR) framework, and the Chinese New Year holiday could have added to the market weakness.
Mr Jeremy Lee, co-founder of SRX, said: "It is clear from the long-term data that the cooling measures are having maximum impact on the volume side of the equation...sales dropped dramatically after TDSR came into effect."
The TDSR, implemented in June last year, prohibits borrowers from taking home loans that bring their total monthly debt repayments to over 60 per cent of their gross monthly income.
Savills research head Alan Cheong said it is "very likely" that cooling measures had hit resale deals.
He added: "More buyers are switching to buying properties overseas - that was the trend last year. People are also holding out for a good deal."
Mr Albert Lu, C&H Properties' key executive officer, said: "People have been busy preparing for Chinese New Year, so they are not ready to go out and start hunting."
The resale market will continue to cool and, even when prices go up, it is not "indicative" of the market when the resale volume is low, experts said.
ERA Realty key executive officer Eugene Lim said: "I believe the resale volume will stay low as sellers and buyers have a mismatch of expectations. Buyers have this impression that the prices will go down but, as a seller, if I'm not under pressure to sell, I won't cut prices."
While the situation is not too rosy for those looking to sell their condo units, it might be the best time yet for buyers.
Mr Lu said: "The best time to buy is when there are not a lot of transactions, so it's less competitive. It's better when the market is quieter, and you can pick and choose the ideal one."