2015 was a slow year for the private real estate market. On top of that, it ended in a rather uncertain way. Unfortunately, going into 2016 there are more questions than answers.
Q1: How did the Private market perform in 2015?
Non-landed Private
In terms of Volume: Activity in the Private resale non-landed market has been in decline since 2010, however, in 2015 volume rose by 22.4% compared with 2014.
In terms of Price: 2015 year end December SRX price index finished at 164.8, down 2.3% for the year.
As you can see from the Non-Landed Private Median Resale Transaction over X-Value graph (TOX), the TOX had been hovering around zero for two-thirds of the year suggesting that prices had stabilized and adjusted to the existing market conditions. But, then in December it suddenly dipped to Negative $5000.
Is this a seasonal adjustment or the sign of things to come in 2016?
Landed Private
In terms of Volume:Activity in the resale Landed market has also been in steady decline since 2010, however, in 2015, it too posted a positive year-on-year increase. In its case, volume increased by 14.1% compared with 2014.
In terms of Price: 2015 Q3 index finished at 197.3, down 2.0% for the year.
Q2: What were the top private resales in 2015?
The most expensive Non-Landed Private resale transaction in 2015 occurred at Nassim Park Residences in District 10. It transacted for $22.5 million, which translates to $3,271 PSF.
The most expensive Landed transaction in 2015 was 35 Ridout Road, also in District 10. It transacted at an amazing $91.7 million or $1,251 PSF.
Q3: What about supply?
Supply of completed non-landed units were strong in 2015, with 18,977 units completed. This was down only slightly from the current peak in 2014 of 19,941 units. In 2016, we will likely beat the peak in 2014 with 22,351 units (excluding ECs) expected to come online. 
Q4: Will Cooling Measures be eased in 2016?
On 12th Jan 2016, at the UBS Investors conference, Minister of Finance Heng Swee Keat suggested that 2016 will not be the year to ease cooling measures. He suggested that keeping the cooling measures in place will help businesses reduce cost by keeping property related expenses down.
Q5: Is 2016 a good time to buy?
2016 will continue to be a buyer’s market. At the end of 2015, a seller typically takes 4.5 months to sell their unit compared to the 3 months at the peak of the market in 2013. Also, sellers are more realistic in their pricing, agreeing to negotiate down 6% from their listing price compared to only 3% at the peak.
With cooling measures still be in place and more supply coming online, we expect 2016 prices in both the landed and non-landed private markets to continue to come under downward pressure.
In addition, there are other factors to consider in 2016 like:
- Rising Vacancy rates,
- Potential Interest Rate Hikes,
- A strong Singapore dollar relative to the Malaysian ringgit and the Indonesian rupiah, and
- A global economic slowdown as a result of China.
These factors suggest a buying opportunity for those who are willing to ignore short-term price volatility and hold onto their properties for the long-run.
However, this type of market is not for the faint of heart. As such, we recommend three steps.
First, seek professional advice and financial planning.
Second, buy within your budget.
Third, work with your agent to use X-Value and X-Listing Price to negotiate the right home at the right price.