Is it a perfect time for dream home purchase? An increase in transactions and price stability may encourage homebuyers who have been on the sidelines to purchase homes in 2017. The property market is experiencing a decrease in prices of private homes and an increase in sales.
“More home buyers are getting back to the market as prices normalize and there are more launches. More sales of executive condominiums and private homes were recorded in 2016 at 11,971 units, 20% more than in 2015,” said Tok Geok Peng executive director DBS Bank.
The figure included a rise in private homes sales of 7.2% from 7,440 sales in 2015 to 7,972 units sold 2016.
To achieve these high sales volumes, developers priced the units from $500,000 to $1 million,” said Ms. Christine Li Cushman & Wakefield director of research.
The sales momentum is hoped to be boosted further by developers with the launch of at least 6 projects in H1 2017. These include Grandeur Park Residences, Seaside Residences, Park Place Residences and Clementi Canopy that opened its showflat on February 11.
Property analysts have noted that private homes transactions in the resale and new markets increased by 10% from 2014 to 2015. The sales also increased by 16% from 14,117 units recorded in 2015 to 16,378 units in 2016.
“Despite the cooling measures, there has been an increase in the sales transactions of private homes over the past 2 years since the introduction of total debt servicing ratio in 2013,” said Alice Tan Knight Frank director of consultancy and research.
Ms. Li noted that the high-end segment or the Core Central Region had most of the improved transactional activity at 49%. The city fringe followed with an increase of 27% while the mass market had a 4% increase.
“The demand for housing could be dampened by the hike of US Federal Reserve rate and the slow economy. However, buying interest could be maintained in H1 2017 by the attractive projects located near MRTs that are in the pipeline if they are priced reasonably,” added Ms. Li.
Ms. Tan observed that there were signs of price stability in 2H 2016 after a decline of 3 years. As the market accepts the present price levels, buyers are making buying decisions instead of the wait-and-see attitude seen in the past 3 years.
“Prices seem to be at rock bottom after falling by about 12% since September 2013. Also, new launches and secondary sales have recorded increased demand. The increased activity is a bottoming trend sign, “said Donald Han managing director Chesterton Singapore.
Mr. Han noted that buyers are likely to reenter the market when there is price stability especially if prices are likely to rise.
He added that investors’ confidence returned to the prime residential market with the recent sales of en bloc freehold sites. Smart money comprising of investment companies and high-net-worth investors are accumulating prime residential properties which will potentially cause transactions volumes to rise in the core central region.
Mr. Nicholas Mak SLP International research head expects 2017 to experience a decline in the private house price indexes although at a slow pace in the first half of the year.
“The decline is due to the existing cooling measures, employment market uncertainty and increasing interest rates. The overall price residential price index may fall between 1 – 3% in 2017 in comparison to 2016 while rent may decline at a rate of 3.5 – 4.5%,” noted Mak.
For more new property launches, you may like to read on Elite Residences; another landed development in District 15, Watercove; a landed property by Bukit Sembawang or a brand new Executive Condominium, the Hundred Palms Residences.