After suffering the impact of the additional buyer's stamp duty (ABSD) introduced in early December, the mass-market segment is beginning to recover with prices for completed private apartments in the Non-Central Region climbing one percent in January.
This was revealed by the latest flash estimates of the National University of Singapore (NUS) Singapore Residential Price Index (SRPI), which also showed a 1.9 percent decline in prices of completed homes in the Central Region. Prices for small apartments of up to 506 sq ft also fell one percent from December.
"This suggests that the ABSD has affected units in the Central Region, where buyers are more likely to be foreign-based or institutional, as well as shoebox units, where buyers tend to be more speculative," said Associate Professor Lum Sau Kim of the NUS Institute of Real Estate Studies (IRES).
"Despite announcements of continued government land supply into 2012, the robust market activity in the non-luxury segment has created sufficient demand tension to boost the secondary market for Non-Central units."
The SRPI measures prices of completed private condos and apartments, excluding executive condos (ECs).
"There's a perception that in the Central Region and for small units, the risks could be higher following the ABSD because these units attract more investors. So owners of such properties may be more willing to take a profit and accept prices that are a bit lower," said Ong Choon Fah, Chief Operating Officer at DTZ Southeast Asia.
According to Ong Teck Hui, Executive Director at Credo Real Estate, "the fall in the overall SRPI is reflective of a slower secondary market which has dropped 25 percent in sales volume over the past year and is manifesting itself in price sluggishness." Related Stories:Home sales volume down in 2011: DTZ
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