December private property prices continue to support the current trend of buyers becoming more cost-conscious in their property purchases. According to the flash report from Singapore Real Estate Exchange (SRX), private property prices in the secondary market slid 0.2% in December 2013—with both CCR and OCR dropping 2.3% and 1.0% respectively. In contrast, properties in the RCR bucked the trend with a price appreciation of 2.9%.
“I believe that secondary resale prices are taking cue from the primary market whereby many developers have slashed their launch prices in a bid to attract buyers”, explained Mr Mohd Ismail, CEO of PropNex Realty, “in addition to the weak market sentiments, the large oncoming supply and various measures in place have worked to further dampen demand.”
However, Mr Ismail is of the opinion that many investors are also waiting for a good deal before committing to a purchase decision.
Post TDSR and increased ABSD, property sentiment is expected to continue to be muted in the immediate future. However, the longer term prospects for the Singapore real estate market remain intact, supported by steady population growth, rising affluence and the allure of property as an investment tool for locals.
But projects of perceived value – such as those in good locations, are in an area of limited supply and/or are offered at lower prices than other units in the vicinity – should continue to shore up demand.
For 2014, prices could dip further—as the latest set of cooling measures will have a deeper and more sustained impact on demand fundamentals. However, severe price corrections are unlikely, barring economic shocks.
Mr Mohd Ismail concluded, “with the bulk of completions coming from the mass market and RCR, I do foresee a marginal price correction of less than 3% in these 2 regions. In the CCR, prices could ease further as the ABSD and TDSR continue to bite. Collectively, both the measures will continue to have a significant impact on the resale market. However, RCR might be a bright spot as they benefit from their location close to the city and lower prices than CCR offerings. This will appeal to many investors who are looking for value-for-money buys near to the CCR.”
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