By Lynda Hong POSTED: 10 Apr 2013 6:18 PM

SINGAPORE: Prices in the resale private property market fell just two per cent in March compared to February, according to data from major property agencies compiled by the Singapore Real Estate Exchange (SRX).

But resale volumes in March jumped 87 per cent from February.

The drop in resale private home prices was led by those in the suburbs, where resale prices fetched S$1,071 per square foot, 3 per cent lower than in February. Non-landed private homes in the city area were resold at an average of S$1,788 per square foot or two per cent lower than the previous month. Prices of those in the city fringes remained unchanged at S$1,301 per square foot.

Analysts Channel NewsAsia spoke to said the marginal movements in property prices are the intentions of the latest cooling measures, where the additional buyers’ stamp duty was raised by between five and seven percentage points across the board from January 12.

ERA’s key executive officer, Eugene Lim, said: “What is holding back buying decision is perhaps a mismatch of expectations, especially in the resale market. There is not much compelling reason for sellers to drop prices. Why? Because we are still having economic growth, full employment; holding cost is cheap. But on the other hand we have buyers who are expecting a big cut in prices because of the cooling measures. It is a normal market response.”

In March, 609 resale private home transactions were recorded – some 87 per cent higher than in February. This was due to fewer resale transactions in February over  the Lunar New Year holidays.

But the number of resale transactions in March is just half that of the same period last year. OrangeTee’s CEO, Steven Tan, said: “If this trend continues and coupled with the large supply of completed projects in the next few months, the resale prices will face more pressure. The performance of the resale market will depend on the primary market in the next few months. If prices continue to go up, it will make some buyers change their minds to switch over to resale market.”

On a quarterly basis, 1,982 resale units were transacted in the first quarter of 2013, compared to the 2,074 units moved in the first quarter of last year. But volumes in the first quarter were down 39% from the fourth quarter last year.

Meanwhile, overall rental prices for non-landed private homes in March remained largely unchanged from February.

Experts say they will be keeping a close watch on the market in the second quarter, when sales are typically more brisk as launches pick up.

Over in the market for new private home launches, incentives offered by developers to offset the impact of the cooling measures appeared to have met with some success.

DWG estimates that developers moved some 5,000 homes in the first quarter of this year. That’s some 12.5 percent more new homes compared with the fourth quarter of 2012.

On the public housing front, the market for HDB resale flats is feeling the effects of the government’s latest round of cooling measures.

Overall cash-over-valuation (COV) for HDB resale flats dropped S$1,000 to end at S$31,000 in March, the lowest monthly COV in the last six months.

But the median resale price of HDB flats rebounded to S$460,000 in March, up 1.2 per cent from S$454,500 in the previous month.

– CNA/ir