RESALE home prices continue to head north in tandem with pricier new launches in the second quarter, as the latest DTZ Research report shows steeper gains across all segments of the property market.
Industry experts cite various reasons for this upward price trend as the effect of January's cooling measures begins to wane.
DTZ's head of South-east Asia research, Ms Chua Chor Hoon, said asking prices of resale homes are continuing to trend upwards as sellers benchmark their home prices against those of new launches.
But with more caution in the market due to the expectation of housing policy reviews after the elections and as price resistance increases, the pace of price gains is likely to moderate for the rest of the year, she added.
Mr Tan Kok Keong, OrangeTee's head of research and consultancy, added that the resale market is driven mainly by owner-occupiers, and they are now back in the market after the initial knee-jerk reaction to the cooling measures.
Cushman & Wakefield's senior manager of Asia-Pacific research, Mr Ong Kah Seng, said the overall price increase could be partly attributed to buyers snapping up resale properties, as such homes are cheaper alternatives to new sales.
Resale homes are also more attractive to some buyers as they offer immediate occupation or an instant rental income stream.
'The overall 2.5 per cent May price increase, however, does not reflect that the previous round of measures was ineffective, as this increase follows after consecutive months of subdued price gains following the cooling measures in January,' he added.
Suburban leasehold condos saw the largest jump, with prices rising by 3.9 per cent in the second quarter, from the previous quarter. This is a significant increase from the 0.8 per cent seen in the first quarter of the year, DTZ's analysis found.
Freehold condos in the prime districts of 9, 10 and 11 and luxury condos also registered higher quarterly resale prices, with a 3.3 per cent and 1.7 per cent gain respectively, against the rather flat prices in the previous quarter.
A monthly index by the National University of Singapore (NUS) has found resale prices of completed non-landed homes strengthening by 2.5 per cent last month compared with April's prices.
This also represented a faster pace of price increase as April's gain was a more subdued 1.1 per cent. While central home prices rose by 3.5 per cent, non-central home prices inched up by 1.7 per cent.
Cushman's Mr Ong viewed the higher price increases for central homes in the NUS index as possibly 'encouraging rather than cautionary' as this is the only segment with prices yet to return to their previous peak in 2008.