SINGAPORE — Resale prices of condominiums and private apartments climbed 1 per cent in July from the previous month, as the number of transactions dipped by 2.8 per cent, based on flash estimates from real estate portal SRX Property.
Resale prices increased by 12.3 per cent on a year-on-year basis, while transaction volumes went down by 1.5 per cent. Prices have climbed 9 per cent since the beginning of this year.
This is the first set of publicly available data on the property market to be released after the latest round of cooling measures on July 5, which had been described as "heavy-handed" by some market experts who felt that the market would have adjusted without the curbs.
However, observers noted that the cooling measures had no significant impact on prices and transaction volumes in the month of July as it moved in line with market trends.
According to SRX data from previous months, resale prices have mostly been going up by slightly over 1 per cent since the beginning of this year, while transaction volumes started declining from April.
Analysts told TODAY that buyers and sellers are adopting a wait-and-see approach as they assess the market to see if there is a need to adjust prices.
Knight Frank Singapore's head of research Lee Nai Jia said that it is still too early to see the impact of the cooling measures on the property market, and he expects a clearer picture to emerge after the Hungry Ghost Festival, which is regarded by some as an inauspicious time to buy property.
However, OrangeTee's head of research and consultancy Christine Sun said that the increase in prices is not an indication that the cooling measures are not working, as they are meant to "slow down the pace of increase".
Based on OrangeTee's previous data, property prices went up 0.1 per cent month-on-month after the first Additional Buyer's Stamp Duty (ABSD) was rolled out in December 2011. Prices also rose 0.3 per cent from the previous month when ABSD rates were revised in January 2013.
This was also the case six months later when the Total Debt Servicing Ratio (TDSR) was implemented, as prices climbed 0.7 per cent the next month.
Ms Sun noted that while prices had increased soon after previous cooling measures were implemented, they subsequently slowed down dramatically in the next few months. With this latest round, "it looks like the trend (will repeat)", she said, as there was a "consistent pattern" in price movements each time a cooling measure was announced.
Other analysts agreed that while prices will continue trending upwards, the pace of increase will be much slower in the coming months.
The continued increase in prices is an indication that "the underlying buying demand in the local private residential market is still fairly healthy," said ZACD's head of research and consultancy Nicholas Mak.
Demand in the property market is mostly from genuine home buyers and cash-rich investors, added Ms Sun, as numerous cooling measures over the past few years have "eradicated much speculative buying and prevented many families from over-leveraging".
But Dr Lee pointed out that property prices would stay flat for longer than before due to the uncertain economic outlook, as compared to the more upbeat sentiment when previous measures were announced.
As for transaction volumes, Ms Sun said the 2.8 per cent drop last month was "lower than expected", as sales fell in the "double digits" in the month after previous cooling measures were implemented.
Mr Mak attributed the dip to a majority of individual sellers being caught off guard by the cooling measures, as they were unable to react as quickly as developers who had brought forward their new launches to avoid the new measures.
Analysts also said that transaction volumes would likely dip further in the next few months.
Huttons Asia head of research Lee Sze Teck expects to see a "bigger drop" in the coming months.
"Sellers are assessing what happens after the cooling measures, whether there is a need to adjust asking prices, and how buyers are reacting to the cooling measures," he added.