Indications the local property market is finally turning the corner are piling up but analysts are waiting for more evidence before calling it.

The latest sign of a resurgence in new private home sales was a Hougang executive condominium (EC) selling out in just seven hours last weekend. It was the first time since 2014 the market has witnessed such a feat.

However, experts are looking for more indications that falling prices have finally bottomed out and are on their way up.

Rising market optimism – driven by a recent tweak in certain cooling measures, a healthy stock market and still-low interest rates – has helped to spur new home sales.

But despite the increase in sales, analysts say it is premature to declare that the market is out of the woods as the recovery is not broad-based.

Typically, in a boom market, prices, rentals and sales volume will all increase, and this has yet to happen.

The good performances of recent launches indicate that there is pent-up demand, but prices have stubbornly continued to decline.

Estimates show home values dipped by 0.3 per cent from the first to second quarter this year. Prices have sunk about 11 per cent since a peak in the third quarter of 2013.

As prices have moderated, sales have climbed. More than 6,500 new private homes (excluding ECs) have been sold in the first half-year, up markedly by 72 per cent from the 3,814 homes sold a year ago.

Analysts expect the brisk buying activity to continue but noted that not every project will be a sell-out.

Hundred Palms Residences EC in Hougang shifted all 531 units at an average of $836 per square foot (psf) within seven hours of their launch on Saturday.

The last time a new project sold out in a day was in January 2014 at The Hillford, a mixed development which was marketed as a “retirement resort”.

Another project, Martin Modern – a luxury condo in Martin Place – sold about 90 out of 450 units over the weekend at a price range of $2,009 psf to more than $2,500 psf.

Given the brisk sales from these projects, all eyes will be on Qingjian Realty’s 516-unit Le Quest in Bukit Batok West – going on sale on Aug 5.

Analysts also note that leasing remains challenging and vacancies are still high.

However, other trends could support the market recovery.

These include the fervour in land bidding by developers in both public land tenders and the collective sale market.

Announcements on two site tenders are expected this week: for privatised HUDC estate Serangoon Ville, put on collective sale for $400 million to $430 million, and the public land tender for a private residential site in Serangoon North Avenue 1, closing tomorrow.

Given the bullish prices paid for development sites recently and more positive sentiment, analysts expect home prices could start to inch up next year, after a 15-quarter losing streak since the fourth quarter of 2013.

The Urban Redevelopment Authority is expected to release the second-quarter final property market statistics this week.

Adapted from: The Straits Times, 26 July 2017