SINGAPORE — Resale prices of non-landed private homes inched up 0.1 per cent last month from November, a preliminary report by Singapore Real Estate Exchange (SRX) showed yesterday, but property analysts said prices would probably remain under pressure, adding that the muted transaction volume signalled that the market was not yet on the road to recovery.

The December uptick, which followed a 1.1 per cent decline in the previous month, was driven by transactions in the Outside Central Region (OCR), or suburbs, where prices rose by 0.5 per cent. Meanwhile, prices in the Core Central Region (CCR), or city centre, fell 1.1 per cent, while those in the Rest of Central Region (RCR), or city fringes, were down 1.2 per cent. Overall resale volume remained flat, with 371 units changing hands in both November and last month, the flash report showed.

Ms Christine Li, head of research and consultancy at property agency OrangeTee, said the mass market segment had been less affected by the Government’s cooling measures and the Total Debt Servicing Ratio (TDSR) framework than the central regions, as homes in the OCR have a relatively lower price quantum and are largely supported by upgrader demand.

Mr Chris Koh, director of property firm Chris International, said: “Once the number of transactions starts to grow, that might signal the start of market recovery. But a price increase of 0.1 per cent is not significant enough.”

He added that the cooling measures and loan curbs, such as the TDSR, will continue to weigh on overall prices. However, Mr Koh predicted that buyers will be lured back into the market by the middle of the year.

“By the middle of this year, prices would have hit a two-digit decline, after which they are expected to stabilise. With this, buyers who have been waiting on the sidelines for prices to drop will be attracted to re-enter the market,” he said.

Year-on-year resale prices dropped 4.2 per cent last month, even while resale volume rose 13.1 per cent, an increase from the 328 units sold in December 2013. However, compared with the peak in April 2010 when 2,050 were resold, resale volume remained in the doldrums, having plunged 81.9 per cent.

Ms Li said prices — which have fallen 6.1 per cent since last January — will continue to decline this year due to the oversupply of homes for resale.

“On a year-on-year basis, volumes have inched up … This is evidence that demand is recovering as prices become more affordable and that the market has adjusted to the TDSR. However, barring changes in housing policies, we see further downside for overall prices in view of the supply overhang and expected interest rate hike,” she said.

Mr Nicholas Mak, executive director at real estate firm SLP International, remains optimistic over the longer term.

“The current downturn in the property market is not caused by an economic recession, but by deliberate cooling measures put in place by the Government. Therefore, once the prices stabilise, people will regain confidence and start buying again,” he said.