The year 2016 has been a tough one for residential property owners but the latest DTZ report says they now have a reason to smile. With decreasing migration, there has been a worrying fall in private property prices but the latest report indicates that sale volumes have increased by 4.4%.
The news can only be good news for residential property owners who have had to contend with falling prices throughout the year. The Urban Redevelopment Authority (URA) says prices of private homes fell by 0.9% in Q2 2015 which is the seventh straight quarter of property price decline.
The numbers released in the DTZ report have buoyed the market considering there was a 29.9% decline over the same period in 2014. Furthermore, this was the highest reported figure in a year that has been nothing but a nightmare for property owners.
More Singaporeans Buying
The report has captured many aspects of the changing residential market demography with Singaporeans now accounting for 78% of the residential property buyers in Q3 2015. This comes against a backdrop of dropping immigration numbers with foreigners previously accounting for a larger portion of the market.
The primary sales transactions rose 13.9% quarter-on- quarter to 2,410 units over the period. The report also notes that the current volume sales by Singaporeans have not been reached since Q3 2013 which was prior to the announcement of the Total Debt Servicing Ratio (TDSR). The number of private home purchases rose by 4.1% quarter-on-quarter to 3,023 units in Q3 2015.
There were still increased non-resident purchases with non-Singaporeans taking 1050 units in Q3 2015 which is 19 homes more than they did in Q2 2015. The report noted that Malaysians and Chinese residents formed the larger part of non-resident purchases over the quarter. Malaysians took up 275 homes while the Chinese, despite their currency problems, snapped 255 private homes.
Another notable aspect of residential property markets in the DTZ report was the decline in HDB purchases by 12% quarter-on-quarter to 1,509 units in Q3 2015. However, on a year-on-year (y.o.y) basis, HDB buyers rose by 20.5 percent with 50% of these sales coming from investors.
Most of the buyers with HDB concentrated on high private residential properties including High Park, Kingsford and Botanique at Bartley.
The DTZ report has a positive outlook for the industry with buyers expected to increase their interest in choice properties in high end locations. There are more launches expected in the industry over November but sales will slow down during the December festivities. In Q1 2014 the report also projects decreased demand in case of increasing interest rates.