The Singapore Residential Price Index, a monthly study on prices of non-landed residential properties by NUS’ Institute of Real Estate Studies (IRES), found that overall home prices in October grew 1% m-o-m. Non-central home prices increased 1% mo- m, while those of central homes grew 0.9%. For small units, which measure 500 sq ft or less, prices edged up 0.6%. IRES noted that since the start of 2012, the changes in the price of non-landed residential properties have shown a clearer positive correlation with sales volume, reflecting the importance of liquidity as a driver of home prices.
The study found that volume of home transactions grew in October, despite the measures introduced on Oct 5, which capped loan tenures at 35 years. Prices of small units contracted after the government announced in early September that the cap on the number of units in a new suburban condo will be based on the average unit size of 70 sq m. IRES is of the opinion that prices and transaction volume of small units will continue to moderate, owing to the restriction, which takes effect on Nov 4.
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