Given buyers’ cautious outlook, sellers have set more realistic price expectations as price declines become more pronounced in the secondary market.
A new report by DTZ Research showed resale prices of luxury condominiums fell the most by three percent quarter-on-quarter in Q2 2014, bringing the total decline for this segment to 5 percent in H1 2014.
The fall in average resale prices of prime freehold condominiums in districts 9, 10 and 11 declined 3.9 percent in the first half of 2014 to $1,840 per sq ft.
Although the bulk of transactions were located in the suburban areas, average resale prices for suburban leasehold condominiums also fell by 3.8 percent in H1 to $904 per sq ft.
Average resale prices of freehold landed residential properties began to turn in Q2, after holding flat for several quarters.
In the prime districts of 9, 10, 11, the semi-detached segment registered a drop of one percent quarter-on-quarter, while prices of detached and terrace homes held up.
In the suburban areas, average resale prices of freehold landed homes declined about two percent quarter-on-quarter, while the average resale prices of leasehold terrace homes fell faster by about 2.5 percent quarter-on-quarter.
Average rentals for luxury and prime condominiums fell by 2.5 percent and three percent respectively quarter-on-quarter in Q2 after holding up in Q1. This is largely attributed to seasonal factors, smaller corporate budgets and an increasing number of private home completions.
In the suburban areas, average rentals fell by two percent quarter-on-quarter in Q2.
In 2013, the number of completed non-landed private homes increased by 17 percent, outstripping the 9 percent growth in the number of rental transactions over the same period.
Rental pressure is expected to be highest in the suburban areas due to the large upcoming supply, and potential tenants will have greater bargaining power.
Between Q2 and 2015, almost 35,000 units are expected to be completed, and more than half of them will be in the suburban areas.
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
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