Tag Archives: price fall

Volume increase but price decrease for private residential homes resale

The number of private home resale transactions was a 7.9 per cent increase over May, but prices fell by 1.4 per cent in June, according to the Singapore Real Estate Exchange.

Resale prices for non-landed private residential homes continued to fall in June, reaching a 1.5-year low, according to the latest report by the Singapore Real Estate Exchange (SRX) on Monday (July 14).

Overall resale prices fell 1.4 per cent month-on-month to hit an 18-month low, with prices at their lowest since December 2012, according to the SRX Flash Report. Compared to the price peak in January this year, June prices are 4.7 per cent lower.

Prices fell for all three regions – Rest of Central Region (RCR), Core Central Region (CCR) and Outside Central Region (OCR) – with the city fringe area leading the fall by 3.2 per cent. This was followed by the core central area and the suburbs, which dropped 1.7 per cent and 0.3 per cent, respectively, SRX said.

The majority of districts – or 15 of 24 districts – saw zero or negative median Transaction Over X-value (TOX) in June. For districts with more than 10 resale transactions, districts 15 (Katong, Joo Chiat and Amber Road) and 10 (Bukit Timah, Holland Road and Tanglin) had the lowest median TOX at negative S$50,000 and negative S$37,000, respectively.

The number of resale transactions went up though, registering a 7.9 per cent month-on-month growth to reach an estimated 452 deals in June. Resale volume has gone up by 53.7 per cent since the beginning of year, the report said.

In terms of rental deals, prices slipped 0.8 per cent compared to May while volume went up 2.2 per cent over the same period. An estimated 3,151 whole units were rented out last month, according to SRX.


Shophouses demand weakens


PRICES of shophouses here have started to see resistance from the market, said a report from Knight Frank, which noted an increasing mismatch between sellers’ high asking prices and prices that buyers are willing to pay.

Sellers who need to let go of their properties have thus had to lower their asking price, which has sent the prices of shophouses down.

The average transacted prices of freehold shophouses have taken a tumble, falling 10.8 per cent from $3,626 per sq ft in H2 2013 to $3,235 per sq ft in H1 2014.

The demand for shophouses among food and beverage (F&B), and retail businesses is also waning, pushing their prices down, said the report.

Prices of leasehold shophouses registered a steeper drop of 23 per cent, from $6,163 per sq ft in the second half of 2013 to $4,717 per sq ft in the first half of this year.

The sharper fall was due mainly to a high base in the preceding half-year, where a property on Duxton Hill went at $8,779 per sq ft and one on Peck Seah Street for $7,818 per sq ft.

On sellers’ high price expectations, Knight Frank Singapore’s executive director and head of commercial sales Mary Sai said they may see their property as scarce, especially in central locations where conserved shophouses are not easily available for sale.

There has been pressure on rental yields following H2 2013, mainly resulting from sellers’ high price expectations.

She added that current owners may be getting decent rental yields from having paid less for their properties previously.

If buyers are unwilling to meet their prices, these sellers are able to hold on to the property for the longer term, considering that replacement units do not come easy, said Ms Sai.

Buyers who pay high prices will face the prospect of compressed rental yields – to as low as 2.5 per cent.

For commercial property, investors seek a minimum rental yield of 3.5 to 4 per cent, she said.

Mortgage loan constraints from the property cooling measures could have also shrunk the pool of prospective buyers.

The report pointed out that the heightened competition from foreign players in the F&B and retail space has also hit demand for shophouses.

On top of this, hiring difficulty and a crunch on manpower have put a crimp on businesses’ expansion plans. They may choose to rent instead of buying.

Transaction volumes for the first half of the year totalled 40, a drop from 49 transactions in the preceding half-year.

While transactions for leasehold properties held steady at seven, transactions for freehold properties in this half fell to 33, from 42 in the previous half.

With shophouse owners holding on to their assets betting on the limited supply of such properties, buyers waiting on the sidelines and retailers opting to lease, Knight Frank expects prices of shophouses to fall 10 to 15 per cent in the next six to eight months.