Private home rents, resale prices fall
RESALE prices and rents for private homes both tumbled to fresh lows last month as the property market slowdown deepened.
The declines underscore the trend which has been evident in the residential market since tougher cooling measures and home loan restrictions were rolled out last year. Consultants believe the gloom is unlikely to lift any time soon.
According to Singapore Real Estate Exchange (SRX) flash estimates yesterday, last month's declines have left resale prices at their lowest level in 21 months. Rents fell to a 38-month low amid greater competition for tenants.
Housing Board flat owners are feeling similar pain, with resale prices dropping to a 30-month trough last month, while recent new launches of private condominiums pulled in lacklustre sales.
Prices of uncompleted private condominiums and apartments have slid about 1.1 per cent since the start of this year, official figures show.
"With all the measures in place, the low sentiments are expected to last," said ERA key executive officer Eugene Lim. "The current private resale market faces a situation of high competition. Landlords are also getting more realistic as it is now a tenants' market."
Prices of resale private homes sank 1.3 per cent last month from June to reach their lowest point since October 2012, the SRX said yesterday. This was after they dropped 1.4 per cent from May to June.
The continued price slide suggested that "it was not merely the World Cup and school holidays in June that dented home buyers' interest. There are larger factors at play", said R'ST Research director Ong Kah Seng.
There were 431 private homes resold last month, largely unchanged from the 427 units resold in June. This figure was 20.5 per cent lower than that in the same period last year, the SRX said.
Private home resale values have fallen about 6.5 per cent since the start of this year, going by SRX data. Mr Ong expects them to fall further and decline by about 8 per cent in total over the course of this year.
The islandwide fall in resale prices last month was led by the city centre, where values tumbled 4 per cent from the previous month. The city fringe saw a 1.1 per cent decline and resale prices in the suburbs slipped 0.6 per cent in the period.
Consultants said that the soft leasing market is a major reason why private home resales are so weak.
Karen Ng, an executive in her early 30s who has been trying to rent out a three-bedder in Alexandra for several weeks, said: "I've already lowered the asking rent by between $500 and $600 but takers are still very few."
Consultants said rents are likely to keep falling as more homes are completed, boosting supply, while the pool of tenants shrinks due to reduced foreign worker inflows.
Mr Ong said investors who buy resale homes would likely be able to negotiate prices.