PRICES of suburban flats are still rising but the pace has slowed as buyers resist paying top dollar in a market flooded with new homes. Experts reckon the 'price stalemate' will continue throughout the year.
Ms Chia Siew Chuin, director of research and advisory at Colliers International, said yesterday: 'The increasing price resistance in the mass-market segment should help to moderate any price increases for the next two quarters.'
Numbers from the Urban Redevelopment Authority yesterday show the trend clearly: Private homes outside the central region recorded a rise of just 0.4 per cent in the three months to June 30 compared with a 1.1 per cent increase in the first quarter.
PropNex chief executive Mohamed Ismail refers to it as a 'price stalemate'.
Buyers are less willing to accept high prices, particularly after the introduction of the additional buyer's stamp duty last December, he noted.
He said the high prices mean new launches now take longer to sell as buyers are more selective and price sensitive. Projects priced below $900 per sq ft are very well-received and garner keen interest from HDB upgraders, he said.
For instance, sales at The Luxurie in Sengkang slowed after A Treasure Trove in nearby Punggol was launched, sources said.
The Luxurie was more than $1,000 psf on average while the Punggol estate was going for below $900 on average.
The best-selling projects in the second quarter - Ripple Bay, Flo Residence and Palm Isles - were priced between $850 and $880 psf, noted Mr Joseph Tan, CBRE's executive director for residential.
Developers also ramped up marketing, offering cash rebates, discounts, lucky draws and celebrity endorsements, he said.
The ample supply of new launches in the heartland, especially in the north-east and Pasir Ris, helped slow rising prices as well, said Mr Eugene Lim, ERA Realty's key executive officer.
Caveats lodged also showed that the volume of transactions in the suburbs dropped 8 per cent, from 5,031 in the first quarter to a preliminary 4,634 in the second.
Knight Frank's head of consultancy and research, Mr Png Poh Soon, reckons prices for the year will be up between 0.5 and 1 per cent over last year.
Despite upcoming supply from the latest Government Land Sales programme, people are still buying at the new launches, in case new cooling measures are imposed. '(Thus), we expect sales volume to achieve a new record in 2012 with more than 20,000 units sold by year end,' Mr Png said.