Resale private home prices remained sticky in the first half of last year despite the implementation of a higher ABSD rate and stricter financing conditions in January 2013, a DTZ report revealed.
However, the introduction of the TDSR framework in June softened the growth of resale prices in Q3 before finally falling in Q4 2013.
Based on a basket of existing properties tracked by DTZ Research, resale prices of luxury condominiums decreased quarter-on-quarter and year-on-year by 2.0 percent in Q4 2013 after holding firm for four consecutive quarters since Q3 2012.
While the number of foreign purchases of resale non-landed private homes worth over S$5.0 million rose from 25 units in H2 2012 to 31 in H1 2013, it dropped to 18 units in H2 2013. The decline is due mainly to the introduction of the TDSR framework last June.
In other non-landed segments, resale prices also declined quarter-on-quarter in Q4, with secondary home sales falling by more than 50 percent to 7,500 units in 2013 from the previous year’s 15,678 units.
Furthermore, the report noted that the landed segment performed better than its non-landed counterpart in 2013 given the limited stock and supply in the pipeline.
But the implementation of the TDSR framework also affected transaction volume, causing resale price growth to slow in 2013 compared to what was seen in 2012.
Moving forward, a downward pressure on resale prices is expected to continue amidst a weak transaction volume and competition from the estimated 20,000 units to be completed this year.
DTZ added: “A major price correction is not expected given that the drivers for the residential market, such as improving economic sentiment and low interest rates, remain relatively healthy.”
Nikki De Guzman, Junior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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