Non-landed private home resale prices up 3.2%

Resale prices of non-landed private homes rose in the third quarter, even as transaction volumes fell 7.3 per cent.

Overall resale prices gained 3.2 per cent to hit a record $1,156 per square foot (psf), led by a 2.5 per cent month-on-month increase in September, data from the latest SRX Residential Property Flash Report released yesterday showed.

The rest of central region (RCR) posted the strongest quarterly gain of 7.1 per cent for resale non-landed in Q3, hitting an historic high of $1,199 psf. This was followed by a smaller gain of 3 per cent in outside of central region (OCR) to $921 psf, and a muted increase of 0.75 per cent in the core central region (CCR) to $1,738 psf.

Resale transaction volume fell 7.3 per cent to 3,296 transactions from 3,555 transactions in Q2.

RCR recorded the largest drop in transaction volume, by 10.9 per cent to 854 transactions, followed by CCR which saw transactions drop 6.2 per cent to 662 transactions. Transaction volumes in OCR fell 5.8 per cent to 1,780 sales.

Meanwhile, rental volumes fell 5.2 per cent in Q3, to 7,723 transactions. Only RCR posted a marginal 0.25 per cent increase in rental transactions, to 2,423. OCR posted the largest drop of 8.5 per cent to 2,777 transactions while CCR saw rental transactions slip 6.2 per cent to 2,523.

Overall rental prices per square foot rose 2.9 per cent to $3.87 psf in Q3. Rents for CCR were $4.68 psf, $4.01 for RCR, and $3.05 for OCR.

Gross rental yields remained stable at 4 per cent in Q3 due to a corresponding increase in rental prices compared with resale prices.

By comparison, URA's flash estimate released earlier this month showed that home prices had inched up 0.5 per cent in Q3. This took into account new sales, which fell 2.2 per cent. It also did not take into account the last three weeks of September sales. URA uses a different methodology from the average psf pricing approach, which is adopted by the SRX index.

Source: Business Times – 6 October 2012