Propertyguru: Why resale prices in the CCR will decline further in 2014

鞋子

The Central Core Region of Singapore is currently the worst-performing in the private resale market, as our story ‘The Reality of the Resale Market’ earlier this week highlighted.

Using official government data PropertyGuru revealed that average private resale prices in the Core Central Region showed a dramatic double-digit 13.75 percent month-on-month decline.

Some readers have since questioned the authenticity of this summary, and have asked why this fact has not been reported by other Singapore media. WhilePropertyGuru cannot answer the second point we are happy to clarify the first and illustrate the point in more detail.

In our Market Outlook 2014 eBook we explained the importance of monitoring transaction volumes. They are critical but often overlooked when measuring and forecasting trends in a property market.

During 2013 the declining trend in transaction volumes provided just such a ‘forward indicator’, with volumes serving as a key market driver for prices in 2014.

The charts below look at the trends of both average resale prices and transaction levels.

Put simply, transaction volume trends usually precede and drive price trends, and typically there is also a lag of around six months for this to occur. This happens in most property markets around the world.

Hong Kong provides a perfect illustration of the relationship between transaction volumes and prices. In Hong Kong, volumes declined significantly in mid-2013 but only some seven months later – in January 2014 – there was a double-digit market price decline.

Interestingly, by the middle of 2013 some journalists were already confident enough – based on the transaction data alone – to suggest that the drop in transaction volumes signalled significant price declines to follow.

There are three relevant points for Singapore to note from this:

1) The relationship between volume and pricing is a universal feature of property markets; it is very likely that Singapore prices will be affected by the same relationships in 2014.

2) The relationship is solid enough for commentators to use it confidently as a price predictor.

3) The ‘lag effect’ between volume and price changes is consistent, and in a range typically of between five to nine months.

So, in the case of Singapore’s Core Central Region, it is very likely that prices will still decline further going into 2014.

鞋子

Guru最近的分析很有水平啊 有理有据有数据

keeprain

guru 算是比较客观的网站，基本上所有看涨看跌的都公布，现在人气也最旺，也有自己的分析团队

H2O_H2O

很不错。判断房价走势，必须看量的。量缩，价必跌。