Chart of the day: Is the private home market finally approaching stabilisation?

Prices are currently on their 11th quarter of decline.

Buyers are becoming more interested in Singapore’s private home market, as price change in the core central region and the rest of central region rose by a slower 0.3% and 0.2% respectively in the last few years, suggesting stabilisation.

According to a report by OrangeTee Research, the percentage price change for the CCR and RCR for 2014/2015/2016H1 were -4.1%/-2.5%/0.6% and -5.3%/-4.3%/0.2% respectively.

“The CCR in particular should continue to receive heightened interest as developers offer deferred payment schemes or/and direct discounts to help buyers cope with cooling measures,” the report noted.

Additionally, the report added that there is further downside risk for the OCR, given the high volumes of completions in the pipeline.

“About 52% of the upcoming supply pipeline is in the OCR. The % price change for the OCR for 2014/2015/2016H1 was -2.2%/- 3.7%/-1.8%,” the report said.

Meanwhile, the tenant’s market continues to prevail in Singapore as rents continue to fall by 0.6% and occupancy rates fall from 92.5% in 1Q16 to 91.1% in 2Q16.

“Notably, occupancy rates in the North-East region dropped to 87.4%. Outlook for the rental market continues to remain dim given the high number of upcoming completions, impact of a slowing economy on the job market and restrained inflow of foreigners,” the report added.

“Market sentiments improving in the primary market Private residential unsold inventories have continued to decline. 23,282 units remain unsold, and this is the lowest level in the last decade. The tapering of Government Land Sales (GLS) sites in recent years has lowered the number of new launches, narrowing buyers’ options. This has led to increased sales in existing launches,” OrangeTee said.