Prices of completed private apartments and condominiums edged up 0.4 percent in May, reversing a revised 0.8 percent drop in April.

Excluding small units, prices in the central region – defined as districts one to four and the traditional prime districts 9, 10 and 11 – rose 1.3 percent in May after a 0.4 percent drop in April. Those in the non-central region dipped 0.3 percent in May after a one per cent drop in April.

These are based on flash estimates by the National University of Singapore (NUS) for its overall Singapore Residential Price Index (SRPI) released on Wednesday.

Notwithstanding the month-on- month fluctuations, market watchers note that prices are seen gradually stabilising.

The overall SRPI has fluctuated within a tight range of between 140 and 142 since October 2016.

Prices in the central region also staged the strongest monthly increase since May 2013. Although it is too early to conclude that the residential resale property prices are headed for a recovery, if the SRPI Central (index) were to display a steady upward trend, it could indicate that the recovery of the property price index would be led by the property prices in the prime districts.

There has been an increase in enquiries in recent months from buyers interested in resale properties in the core central region (CCR).

There is a waiting fatigue for the additional buyer’s stamp duty (ABSD) to be fine-tuned, and this is why more buyers are entering the CCR despite having to pay the ABSD.

In general, prices have been observed to be stable and they have reached an equilibrium. But prices of small units will remain under greater pressure, especially as more small units are completed.

Notwithstanding, the downside may be short term with demand for smaller units expected to grow due to the ageing population, which results in more downsizing, and the increasing number of singles.

The main drag in May came from completed small units with a floor area of 506 square feet or below – they saw a 1.3 per cent price fall in May after a 0.6 percent rise in April.

In the second half of 2017, prices are expected to move up slightly by 0.5 to one per cent. For 2018, assuming the interest rate hikes remain subdued and barring any economic shock, resale prices may appreciate one to 3 per cent.

Adapted from: The Business Times, 29 June 2017