Private resale property market to cruise on status quo

2016 proved to be a roller coaster year for the private home market, as prices fluctuated throughout the year but never quite settled into an upward swing. Price increases lasted hardly a quarter before turning the opposite direction and movements differed between regions as well.

SeletarParkResidencesAcross the board, resale private home prices rose 0.1 per cent. Most of the increase were for properties in the prime districts. Prices here rose 1.8 per cent while falling 0.9 per cent and 0.4 per cent in the city fringe and suburban districts respectively. Location continues to rule buyers’ decision-making process and prime district home prices remained stable despite the year-end lack of market activity.

As the rental market continues to wane and competition from completed properties put further pressure on rental prices, more private condominium unit owners may be pushed to sell this year as they come to the end of their 4-year holding period, after which they will have to foot their sellers’ stamp-duty bill. Buyers of resale units could have the upper hand when it comes to negotiations in these cases.

NathanResidencesThe number of private apartment units sold have been falling as well, with 484 units sold as compared to the 618 sold in November. Though the numbers are higher than the 453 units sold in December 2015, it is still a far cry from the 2,050 in April 2010 – a 76.3 per cent fall in fact. Property analysts are expecting prices and sales volume to maintain their current levels, though 2017 could be more a year of keeping the status quo than quick recovery.

Downturn for Downtown homes

The luxury property market has taken a downturn as homes in the downtown areas take a hit. Transactions were still taking place, and there were homes being resold, but an increasingly number of them at a loss. Recent transactions show a $60,000 loss in the resale of a Marina Bay Residences unit just last month. One of the largest differences came from a $342,000 loss from a subsale of a Robinson Suites unit.

eMuch of the competition comes from unsold stock from developers, a dipping rental market and a diminishing expatriate population. The first factor could be the most hurtful to investors as some developers have begun adjusting prices downwards, and even renting out unsold units instead of selling them. This puts up fierce competition for buyers who have originally planned for their properties to earn them the monthly sustenance through rental. Even small apartments and and one-bedders are meeting similar fate.

Downtown home prices have fallen 8 per cent, and properties in the prime districts 9 and 11 have fallen 5 per cent. Ultimately, it may come down to holding power. And learning some tricks of the trade through property seminars and talks could be the best way to safeguard yourself from bad investments.

City fringe homes see big rise in price margins

Just outside of the prime districts yet not far enough into the suburbs, city fringe homes have been under the radar for a long time. But this year, they have climbed silently but surely to the top.

Suites @ Newton, one of the popular city fringe districts.

Also termed in some instances at the Rest of Central Region (RCR) has trumped both suburban and prime district homes in the new sales and resale market. And perhaps it is simply a matter of time. With close proximity to the city, easy transport links with new MRT lines and bus services, yet just exclusive enough, away from the constant buzz of the city, it’s a wonder city fringe homes were not picked up earlier.

Renting these units out to expatriates also prove to be an easier task, especially to those who may have had their housing budgets scaled down. City fringe homes can be almost 20 per cent cheaper than city centre homes, and ares such as Balestier and Geylang have been taking the lead. Rents have also been rising for the past 2 years, up nearly 12.5 per cent. With more than 20,000 new homes in the city fringe area to be completed within the next 5 years, it might be prudent to measure how much you can get out of rental yields and consider if buying a resale unit is better than new one.