Overall prices of resale non-landed homes crept up marginally last month, largely fuelled by a stronger rise in prices of so-called shoebox units.
But even prices of these tiny homes, typically about 500sqft or less, rose at a more subdued pace of 1.4%, compared with 2.4% in June.
Flash estimates for the Singapore Residential Price Index (SRPI), which monitors transactions of non-landed completed projects, indicated overall price growth of just 0.2%, lower than the 0.7% recorded in June.
Ms Petra Blazkova, head of Singapore and South East Asia research at CB Research Ellis, said she has observed a dip in demand for small homes.
But she added that this fall in interest might be a blip caused by uncertainties brought on by the economic crises in the United States and Europe.
“In the long term, we will continue to see more interest, possibly until 2012. The supply of such homes remains steady and smaller units are seen as a more affordable class of property for those who are interested in putting their money in property,” said Ms Blazkova.
Knight Frank’s research head, Mr Png Poh Soon, agreed. He said property buyers may also be banking on the long-term potential of such homes, especially if they are in good locations, such as the upcoming commercial hub in Paya Lebar.
Prices of suburban homes were fairly stable, moving up 1.2%, unchanged from the previous month, while prices of homes in central districts declined by 1.3%.
While the figures indicate that buyers are still keen on resale suburban properties, analysts anticipate that revisions to the income limits set for public housing will dampen that demand.
The higher income ceiling will allow more home hunters to buy HDB flats.
Many industry experts say the true effects of this policy change will probably be felt when newer public housing projects are rolled out.
They said that in the next few months, prices of resale homes could reflect a shift to public housing from buyers who would have otherwise chosen to purchase private property.
Market watchers say the latest 0.2% rise in resale prices is a good sign, and indicates that the market is finding some balance despite the uncertainties clouding buyer sentiment.
Some buyers are more cautious about what their next move will be.
However, Mr Png said he has observed another group of home purchasers who are taking advantage of what they deem to be a good investment opportunity.
“(This) group is made up of people who still believe that with interest rates remaining low, property is a less volatile investment than putting money into the stock market.”
“Even if prices drop, these people will hold on and rent their apartments out.”
Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-East Asia, expects slower growth of prices in line with doubts over global economic conditions.
Although he expects the resale market to face some fluctuations, he said it is likely prices for this segment will stabilise throughout the rest of the year.
Dr Chua said prices for both new and resale property might appreciate between 1.5 and 2% in the remaining quarters, growing 7% for the whole of 2011.
Source: The Straits Times