Singapore's resale property market continues to slow as buyers remained on the sidelines after the government's latest round of property cooling measures.
Flash figures from the Singapore Real Estate Exchange (SRX) revealed that transaction volumes in both private and HDB resale markets fell last month.
Prices stayed fairly resilient as the overall median price of resale HDB flats inched up, while prices of resale private homes declined marginally in April compared to March
Meanwhile, analysts say a continued drop in HDB cash-over-valuation (COV) and slowing volumes are indicative of an imminent correction in HDB prices.
COV for HDB flats fell for the third consecutive month in April, according to SRX.
At $30,000, April's COV is at its lowest value since September 2012.
Still, overall median resale price of HDB flats inched up 1.1% to reach $465,000 in April. Resale volumes of HDB flats remained stable, with 1,271 units sold.
Year on year, transaction volumes slumped 36%. There were 2,000 HDB resale flats transacted in April 2012.
Earlier this year, the government lowered the mortgage servicing ratio (MSR), from 50 to 30%.
Mohammad Ismail, CEO at PropNex, said: "On average, banks would give 50% of someone's income to finance the monthly installment but that has been reduced to 30% and that's a drastic drop...and that causes a lot of people to think twice. It is very glaring that the public housing is heading for a correction in price. In another word, the heyday of double-digit growth is over. For that matter, even last year's 6-over percent growth is not likely to be repeated. Moving forward, public housing will probably experience low growth of probably 3 to 4%.
"The first quarter recorded the lowest volume of transactions in 15 years. We only recorded about 4,300 transactions whereas last year the average was in the tune of 6,500."
Meanwhile, resale transaction volumes for non-landed private homes in April slowed to 572 units, compared to the 614 units sold in March.
Year on year, this represented a more than 50% drop. There were 1,240 non-landed resale units in April 2012.
Donald Han, CEO of HSR Property Group, said: "This is directly impacted because of government measures on January 11. Investors who have properties are more reluctant to release these properties into the marketplace and because of that there has been a lack of supply for secondary markets that are available for transaction.
"A lot of investors are holding back the selling of secondary market property because if they sell it, it would be harder for them to buy back again because they would be imposed 10% ABSD for the second property."
Month on month, prices of resale private homes dipped 0.4% in April.
Resale prices of suburban private homes climbed 1.0% to end at $1,022PSF. But this was more than offset by declines in the city area and city fringes.
Both CCR (core central region) and RCR (rest of central region) saw equivalent price drops of 1.9% over the previous month to reach an average per square foot of $1,772 and $1,267 respectively.
This is the fourth consecutive monthly drop for CCR since its price peaked in December 2012.
Analysts say this is due to falling demand from foreign investors and permanent residents - who typically buy property in the core central region - as they have been affected by the additional buyer's stamp duty, where they are charged between a 7 and 15% tax.
Analysts say the resale private property market is likely to remain quiet as buyers continue to turn to new sales.
Source: Channel News Asia
On a related note, our de facto business newspaper has reported that overall rental prices slipped 1.0% in April. rental prices fell by 4.4% in RCR and by 0.9% in Outside Central Region (OCR) areas. But in CCR, rents picked up 2.1% to $4.79psf.
Rental yields softened in both RCR and OCR, while yields in CCR continued their climb to reach 3.25%. Despite yields softening, RCR still showed the highest gross yield of 3.73% as at April, followed by OCR's 3.68%.
Looking ahead, rents may soften further as more projects are completed, and as the tightened quota on foreign workers kicks in, leading to fewer of them coming here and needing accommodation.
Further, given that the supply of suburban homes has significantly increased, this will keep suburban rental prices down.
Not so good news for property investors...