The best buys seem to be at the higher end, with prices holding steady in the mass-market segment
Homebuyers seem to be happy waiting on the sidelines for noticeable price declines.
Because of the uncertainty about the economy, fewer completed homes have been sold in the resale market so far this year than in the previous six months.
To date, around 4,000 resale transactions have been recorded, says CBRE Research. In contrast, more than 20,000 resale homes (excluding collective sales) changed hands last year, a record year for such deals.
Already, prices of some of these homes have fallen, though many sellers are still reluctant to lower prices.
The good news is that more sellers, particularly those of high-end homes, are expected to sell at lower prices if the current mood does not lift.
'The current downward adjustment of home prices is seen only in certain projects and certain locations,' said CBRE Research executive director Li Hiaw Ho. 'But it may become broad-based if the subdued sentiment persists and sales volume remains low.'
DTZ says that, with high inflation compounding the expected slowdown in the global economy, prices of new and resale homes are set to correct further.
High-end and mid-tier deals
According to URA Realis data generated by CBRE Research, over the period from the beginning of last year to the first half of this year, the most resale deals were done in districts 10, 15, 16, 19 and 23.
District 15 - made up of the East Coast, Katong and Tanjong Rhu areas - seems to be the most popular with Singaporeans, who snapped up 2,200 resale homes.
In contrast, district 10 - which includes Orchard Road, Tanglin, Holland Road and Bukit Timah - has seen resale prices drop fairly significantly.
'Generally, sellers are lowering their asking prices, but not all are selling below market,' said Colliers International's director for research and advisory, Ms Tay Huey Ying.
Those likely to sell below market - or below the peak prices seen last year - are the ones with high-end or mid-tier properties, she said.
Suburban resale homes
District 19 - which includes areas such as Hougang, Upper Paya Lebar and Upper Serangoon - has chalked up the highest proportion of Singapore buyers.
Since the start of last year, 81 per cent of the resale properties in this district have been taken up by local buyers.
Prices have even risen, albeit marginally, so far this year.
Ms Tay said the resale market can be divided into two categories. The first covers those properties whose values have been chased up significantly by speculators, new launches nearby or attempts to go en bloc.
'These properties would be more likely to decline in price,' she said.
The second category covers projects that were left behind last year and might be undervalued as a result.
These are mostly suburban, mass-market properties whose prices are likely to remain stable or even rise slightly, said Ms Tay.
Doing your homework
There are always bargains to be had in the resale market, but buyers should do their homework before committing to one, said Chesterton International's head of research and consultancy, Mr Colin Tan.
If the unit is too old, leaking pipes and worn-out electrical wiring could be a problem, he said.
'Before buying a really old resale unit, you should work out the cost of replacement and incorporate that into your offer price,' he noted.
For very old units, buyers should check to see whether the development has been well-maintained, as well as whether major upgrading works have been carried out in the past 10 years, added Mr Tan. Otherwise, they should check whether the sinking funds are healthy, that is, whether enough money has been set aside for major works.
As sellers of resale units are typically individuals, they are usually more flexible than, say, a big developer, say property agents. Buyers can look out for units that have been on the market for a while, they say.
Still, an investor who wants to earn rental income right away should look for a resale property with a combination of attributes such as a prime location, a sea view, condo facilities, amenities, recreational facilities and proximity to an MRT station, advised Mr Li.
SEEKING VALUE
# District 16, in which condos such as Costa Del Sol and The Bayshore are situated, was among the five districts with the most resale deals since the start of last year.
# Prices in the area fared relatively well, down just 1.6 per cent in the six months ended March, compared to districts 10 and 15 where prices fell 13.5 per cent and 6.9 per cent respectively.
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