The decline in private home prices is wooing buyers back to the market and giving agents something to cheer about after a few lean years.
Estate agencies said their agents closed around 20 per cent to 40 per cent more transactions in the first nine months of the year than in the same period in 2015.
Prices have been sliding and it has perhaps reached a level that potential buyers are somewhat comfortable with, said a consultant.
Prices are down 10.8 per cent from a peak in the third quarter of 2013. A drop of that size after years of steady rises has proved enough to entice wary home seekers.
Engineer Kelvin Kwek and his wife have finally made the jump after four years of property searching.
“We have been looking around but prices then were still high. This year, prices slipped so we decided to invest… It’s an upgrade of living style for us,” said Mr Kwek, who bought a new three-bedroom unit at Forest Woods in Lorong Lew Lian for $1.27 million.
Despite lacklustre economic prospects, concerns over job security and rising vacancies, the demand for private homes this year seems to have kept pace with last year in the wake of falling prices.
Private residential transactions were 6.8 per cent higher in the first nine months of this year at 11,254 – both new sales and resale – compared with 10,533 transactions in the same period last year.
Meanwhile, transaction volumes were up 20 per cent for ERA Realty Network.
With cooling measures expected to remain unchanged and interest rates still relatively low, some of these buyers have decided to deploy their capital and enter the market.
There were 5,587 resale deals in the first nine months of the year, up on the 4,696 sales in the same period last year. Sales of new units came in at 5,667, lower than the 5,837 sales in January to September last year.
Developers and resellers have also become more competitive in pricing units in the face of challenging market conditions and price-sensitive buyers.
Attractively priced resale properties have recently sold at The Makena in Meyer Road at $1,245 psf, Helios Residences in Cairnhill Circle at $2,088 psf and Valley Park in River Valley at $1,357 psf.
But some home hunters are prepared to wait for even better deals.
“I think there’s a good chance prices could drop further, seeing the way the economy is now,” said financial consultant Sanjay Ashok Wadhwani, who is looking for a resale unit for his own use.
Private home prices saw their steepest fall in seven years in the third quarter, tumbling 1.5 per cent from the previous three months, according to flash estimates.
ERA Realty Network key executive officer Eugene Lim expects prices to “continue to trend downwards” for the rest of the year, projecting a decline of 3 per cent to 3.5 per cent for this year.
An analyst noted that if the investment is for owner-occupation, there is no harm going back to the market; if it is for investment, particularly with the view of renting the units out, it is better to wait or be selective when buying.
Adapted from: The Straits Times, 17 October 2016