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Price growth stagnates in both public and private residential market
Singapore Property Market News and Analysis

Latest Property Real Estate News - Published on 02/07/2012

Marginal increase in HDB resale price index

With the bumper release of BTO flats in the market, the Resale Price Index (RPI) has marginally inched 1.3% to a new record high of 194.0, according to HDB’s release of the 2Q12 flash estimate today.

Referring to PropNex’s 2Q12 data, which also reflect both median resale prices as well as Cash-Over-Valuation (COV) rising marginally. PropNex has over 30% of the HDB resale market share, counting unique property transactions, instead of agent transactions.

“With the moderation of HDB resale prices in 1Q12, buyers who did not qualify under the BTO purchase requirements like the singles, permanent residents, HDB upgraders and downgraders, are still purchasing in this market segment. HDB resale market prices have reached its peak and are not expected to for any substantial growth in price in the coming quarters as buyers are becoming reluctant to pay high COVs.”

“The RPI has consolidated its high prices and growth will be less than 2% in the next quarter and I am not surprised to see a negative growth in prices towards the end of 2012. Overall, the HDB price increment will be muted with no significant growth in the coming month,” remarked CEO of PropNex Realty, Mr Mohamed Ismail.

Based on the PropNex data extracted here, it reflects the overall price consolidation with greater price increments in smaller flats like that of 3-room and 4-room.

PropNex’s Median Resale Prices by Flat Types

             3-Room   4-Room   5-Room  Executive
1Q12   $333,000 $424,000 $500,000 $604,888
2Q12* $339,230 $435,000 $508,000 $608,500

%age Change Q-on-Q 1.87% increase 2.6% increase 1.6% increase 0.6% increase
*Based on PropNex data up till last week of June 2012.

PropNex’s Median COV by Flat Types

            3-Room 4-Room 5-Room Executive Overall
1Q12 $22,000 $26,000 $28,000 $40,000 $25,000
2Q12* $20,000 $25,000 $28,744 $40,000 $25,000

%age Change Q-on-Q 9% decrease 3.8% decrease 2.6% increase No change No change
*Based on PropNex data up till last week of June 2012.

In view of the 1.9% overall price growth in the first half of 2012, Mr Ismail predicts that the overall resale price index is likely to be less than 4%, unlike that of a double digit price increase in 2011.

Price Resistance in Private Property Market

\In the private property market, URA’s price index 2Q12 flash estimates saw a 0.4% increase Q-on-Q to another record high of 206.8 points, with the Core Central (CCR), Rest of Central (RCR) and Outside Central (OCR) regions chalking up incremental increases of 0.6%, 0% and 0.4% respectively.

Private property resale sellers are not motivated to sell at their properties due to the relatively low interest rates and also many completed projects are now being rented out with a rental yield covering their mortgage. Buyers, on the other hand, are resistant in paying higher prices especially after the introduction of the Additional Buyer’s Stamp Duty. This had resulted in the stalemate of prices especially in the CCR and OCR.

However, it is interesting to note that sales activities are sprouting in 2Q12, as genuine buyers are slowly returning to the market. According to Mr Ismail, it is expected that the overall resale price index in the private property sector will see a less than 1% price growth in 2012.


For media enquiries, please contact:

Carolyn Goh
Corporate Communications and Marketing Manager
P & N Holdings Pte Ltd (holding company of PropNex Realty)
480 Lorong 6 Toa Payoh #10-01 HDB Hub East Wing Singapore 310480
DID : (65) 6829 6968 / 98287834 | Main : (65) 6820 8000 | Fax : (65) 6829 6600

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