August resale prices of condos stay flat
Resale prices of completed private apartments and condos in Singapore stayed flat in August, based on flash estimates from the National University of Singapore’s Singapore Residential Price Index (NUS SRPI).
Both prices for the overall market as well as the central region (defined as districts 1-4 including the financial district and Sentosa Cove, and the traditional prime districts 9, 10 and 11) were unchanged in August compared with July. Their price indices excluded small units of up to 506 sq ft.
Bucking the trend slightly were prices in the non-central region as well as those of small apartments, both of which edged up a marginal 0.1 per cent in August.
“The flash NUS SRPI numbers indicate that resale prices have remained rather flat in August on the back of low volumes,” said associate professor Lum Sau Kim of the NUS Institute of Real Estate Studies.
“There are two plausible reasons for the plateau in prices and the low turnover. First, sellers may be timing their exit to reduce the applicable hurdle rates in terms of sales levies (seller stamp duties) and can do so due to their holding power.
“Second, there could also be a widening spread between bid and ask prices, resulting in fewer successful transactions.”
Indeed, the transaction volume of completed condos was low in August. Only 318 units changed hands, versus 376 in July. Of this, 10 small units were transacted, versus six in July.
One possible reason for the slow sales activity in the secondary market in August was the Hungry Ghost month. The low volume caused property prices to move sideways.
Secondly, there were no new launches of private residential projects in August. Therefore, the primary market was fairly inactive, which contributed to an inactive secondary market.
The SRPI series sometimes shows trends that deviate from broader-based data from the Urban Redevelopment Authority (URA) or Singapore Real Estate Exchange (SRX) because it tracks a smaller basket comprising only completed private apartments and condos that are less than 10 years old. Other indices may include sales of new and uncompleted units by developers, as well as transactions in older projects.
Source: Business Times – 30 September 2014