Completed condos remain on price slide

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http://www.businesstimes.com.sg/premium/singapore/completed-condos-remain-price-slide-20140730

Prices of completed private condos resumed their fall in June as distractions from the school vacation and World Cup fever dampened buying interests.

A looming supply of completed homes and weakening leasing demand will continue to weigh on prices, market watchers say.

Last month, the Singapore Residential Price Index (SRPI) released by the National University of Singapore (NUS) slipped one per cent month-on-month in June, after a revised 0.4 per cent rise in May.

Small units of 506 sq ft and below saw a 0.4 per cent dip in prices last month nationwide.

The NUS indices, which track completed private condos and apartments, excluding executive condos, reflect transactions received as at July 21.

Official figures from URA last week showed that there are a total of 1,412 private homes that are completed but unsold as at end-June. And the bulk of these unsold units - 63.3 per cent - are located in the Core Central Region, which covers districts 9, 10, 11, downtown core and Sentosa.

Vacancy rate is also on the rise, according to URA, climbing from 6.6 per cent in the first quarter to 7.1 per cent in the second - the highest level since the 7.4 per cent recorded in the first quarter of 2006.

Nicholas Mak, executive director of SLP International, reckoned that a higher proportion of suburban condos bought during the property boom of 2009-2013 was investment-driven, compared to that during the 2005-2007 boom.

As more units in OCR reach completion next year onwards, there will be some pressures - first on the rental market and then on resale prices, Mr Mak said.