[SINGAPORE] Homebuyers are demonstrating growing resistance towards further price growth in the mass market segment, turning instead to completed higher-tier properties in the secondary market.
According to the latest flash estimates by the Urban Redevelopment Authority (URA), the price index for non-landed private homes in the Core Central Region (CCR) rose 0.6 per cent, following a comparable drop the previous quarter. The price index for Outside Central Region (OCR) - where mass market condos are located - on the other hand saw prices increase at a slower pace of 0.4 per cent for Q2, compared with an increase of 1.1 per cent the previous quarter. Rest of Central Region (RCR) saw no change in prices.
"The narrowing price gap between new mass-market homes and completed higher-tier properties in the secondary market has enhanced the attractiveness of the latter segment. This has prompted discerning buyers to seek opportunities for mid- and high-end homes in the secondary market," said Chia Siew Chuin, director of research & advisory at Colliers International.
According to DWG Research, resale transactions have shot up by 33.1 per cent in Q2, compared with a 9.9 per cent fall in new sale transactions.
"The price trend is reflective of the sentiment in the market," said Lee Sze Teck, DWG senior manager (research and consultancy). "Some buyers went back to the resale market in search of deals which they think offer them better value than what is available in the new sales market."
Separately, the high-end segment saw more sales activity in Q2 compared with the previous quarter, noted CBRE executive director (residential) Joseph Tan.
Notable deals included five units in TwentyOne Angullia and 13 units in Marina Bay Suites that were sold at $3,900-$4,300 psf and $2,180-$2,775 psf respectively.
On the mass market front, top-selling projects in the quarter were Ripple Bay, Flo Residences and Palm Isles which were priced between $850 and $880 psf.
Looking ahead, there is a pipeline of major project launches, which include Riversails (920 units), Parc Olympia (486 units), projects at Jalan Lempeng (892 units), and Alexandra Road (560 units). In the CBD, V On Shenton (510 units), and a project in Marina Bay will be launched.
"With the forth-coming supply, new homes sales may number 3,000-4,000 units per quarter. We expect home prices to remain stable and rents to see a marginal decline in the later part of the year," said Mr Tan.
Alan Cheong, Savills Singapore research head, said that he expects the CCR index to rise in Q3, with the launch of V on Shenton expected to lift sentiments.
"As most transactions these days are from new home sales in OCR, the prices of just launched or upcoming launches of mass market projects in the Ponggol area would have a strong influence on how the overall index will behave for Q3 2012," he added.
However, even as high liquidity and favourable interest rates remain supportive of home-buying demand, it remains to be seen if the strong sales momentum can be sustained for the second half of this year, said Ms Chia.
"Increasing price resistance and the onslaught of the upcoming supply of residential land through the H2 2012 GLS Programme may work to ease demand," she said. "Furthermore, the increasing price resistance borne out in moderating price growth in the mass-market segment should help to moderate any price increases for the next two quarters . . . Private home prices are foreseen to remain relatively stable with marginal upsides for H2 2012."
Knight Frank expects the property market to balance at 0.5-1 per cent year-on-year price increase by the end of 2012, in light of the upcoming GLS supply. Despite this however, buyers are still flocking to new launches in anticipation of additional cooling measures. "As such, we expect sales volume to achieve a new record in 2012, with more than 20,000 units sold by year end."
URA estimates show that the overall private home price index rose 0.4 per cent quarter on quarter in Q2 this year. This pushes the price index to a record high of 206.8 points.
Non-landed home prices in both CCR and OCR are also at record highs based on the flash estimate.
The flash estimates are compiled based on transaction prices given in caveats lodged during the first 10 weeks of the quarter, supplemented by information on the number of new units sold by developers.