The price gaps for secondary private residential market in Core Central Region (CCR) versus the Rest of Central Region (RCR) and Outside Central Region (OCR) have been narrowing since the market softened, according to a report by HSR.
The price gap between CCR and RCR median prices reached a high of $610 psf in Q4 2011. In Q2 2014, this gap fell to $461 psf. This translates to a 24 percent decline.
Similarly, between CCR and OCR median prices, the price gap has fallen from a high of $870 psf to $712 psf for the same period, marking a decline of 18 percent.
One possible reason is the high correlation between the percentage of non-Singaporean buyers and the price gaps between CCR vs. RCR/OCR. “In other words, the higher the percentage of non-Singaporean buyers, the higher the gap is,” the report said.
Since 2007, non-Singaporean buyers make up on average about 47 percent of yearly transactions in the CCR, 34 percent in RCR and 31 percent in OCR.
At the peak of the gap in Q4 2011, non-Singaporeans represented 61 percent of the total secondary transactions for non-landed properties in CCR compared to 35 percent in 1Q 2014.
During the last Global Financial Crisis, the price gap between CCR and RCR fell from a peak of $643 psf in Q4 2007 to $367 psf in Q1 2009. HSR believes this gap will continue to shrink by another $50 to $100 psf as property prices continue to fall.
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
