Rising sales volumes, bullish land bids by developers and price dips that appear to have tapered off hint at a property market recovery next year.
The saying goes that a rising tide lifts all boats. But to use the aphorism to describe the private residential property market here would be somewhat inappropriate.
There is gathering optimism in the sector for sure – home sales are up and developers are falling over themselves tabling audacious bids for sites, and there is a resurgence in collective sale activity.
These point to renewed confidence in the real estate market, but home prices and rents are still falling and vacancies remain high, making it hard to read the market.
Consultancy Colliers International said condominium rents plummeted by more than 12 per cent as of March 31 from a peak in the third quarter of 2013.
The persistently weak leasing market has kept some investors at bay. Small-business owner Derick Tang, who has been looking to buy a three-room condo unit in the East Coast Park area for investment, says he is not rushing into any purchase owing to the poor rental market.
“It is not worth the heartache when you have to rent it out cheaply or suffer the horrible experience of searching for tenants. I am not worried about prices going up, so I will wait,” Mr Tang, 38, told The Straits Times.
Yet many others have flocked to pick up units – both new and resale homes – in recent months, particularly after the Government eased certain cooling measures in March.
That the property market is sending mixed signals may seem confusing, but analysts – reading the various signs – say they hint at a potential recovery following a three-year slump in prices.
SALES UPTURN
“The slowing rate of price decline and rising volumes suggest that demand and supply are converging, and would bring about a stabilisation in prices,” OrangeTee head of research and consultancy Wong Xian Yang said.
Private home prices fell over the last three years but at a slower clip, with a 3.1 per cent drop last year, and declines of 3.7 per cent in 2015 and 4 per cent in 2014.
“Source:[Mixed signals hint at property market recovery] © Singapore Press Holdings Limited. Permission required for reproduction”
