Resale prices of private non-landed homes in August fell for the first time in 12 months after property cooling measures took effect in July. Condominiums and private apartments saw a 0.2 per cent drop in prices in August from the previous month, according to the latest flash estimates from real estate portal SRX Property yesterday.
July's flash estimates showed that resale prices rose 1 per cent month-on-month, making for 12 months of uninterrupted rise.
Some market observers were expecting private resale prices to stay in positive territory for the rest of the year, but rise at a slower pace after higher additional buyer's stamp duty (ABSD) rates and tighter loan-to-value limits kicked in on July 6.
The volume of transactions also saw a big drop last month, with an estimated 694 private non-landed homes resold, down 35.3 per cent from 1,072 units in July. Year-on-year, the resale volume was 48.2 per cent lower than the 1,339 units moved in August last year.
Commenting on the data, OrangeTee & Tie research and consultancy head Christine Sun said: "These downtrends may be an early indication that resale prices may have peaked in some residential segments and are starting to soften under the current cooling measures."
With the dip last month, the 9 per cent rise in resale prices so far this year has come down slightly to 8.8 per cent. Compared with a year ago, prices are 11.2 per cent higher than in August last year. The resale prices of apartments in the city fringe or Rest of Central Region fell 1.6 per cent from July, while those in the prime district or Core Central Region fell 0.3 per cent. These are homes more likely bought for investment or speculative purposes and to which the new ABSD rates and loan limits are likely to apply.
In contrast, resale prices of units in the outlying areas or Outside of Central Region, which are more likely bought by genuine home buyers, continued on the uptrend, rising 0.8 per cent in August.
In another indication of the wind being taken out of the sails in the resale market, the premium buyers are prepared to pay over market value continued to fall after a sharp drop in July, going by another SRX measure. The overall median Transaction Over X-value (TOX) fell to zero last month, after falling to $4,000 in July from $17,000 in June, before the latest cooling measures. TOX measures how much a buyer is overpaying or underpaying for a property based on SRX Property's computer-generated market value.
Noting that over half the districts recorded zero or negative median TOX, meaning more people sold below valuation, Ms Sun said this "may indicate that the winds have shifted from a seller's to a buyer's market".
Bishan and Ang Mo Kio in District 20 posted the highest TOX of $25,000, among districts with more than 10 resale transactions. Telok Blangah and HarbourFront in District 4 posted the lowest TOX of negative $37,000.