Resale price index rises 2.3% in January

But property measures may still need tweaking.

The latest SRX Private Residential Flash report for January 2014 showed a 2.3% rise in January's reslae price index and a 1.1% rise in the rental index, which bodes well for the industry, says Alan Cheong, Senior Director, Research & Consultancy, Savills Singapore.

“The latest flash estimates is hearty news for insiders involved in the residential market trade. Although monthly data may sometimes be deemed as harbouring too much “noise” or volatility, especially when resale transaction volumes have fallen 70.2% y-o-y, the numbers still look encouraging," said Cheong.

But he cautioned that the positive news should not gloss over the fact that pessimism is spreading in the market and may be catapulting a market collapse.

"These numbers must not detract us from the fact that right now, pessimism is festering even though many can still afford to buy private residential properties. Therefore for the authorities, a decision has to be made as to whether some or all the property measures should be tweaked, or if they believe that fundamentals are still strong, be left unmolested," said Cheong.

"Yet a case can be built for tweaking the measures in order to reduce the transactional friction which hitherto had been viewed at as repugnant by buyers and also used by others as being the root cause of triggering an impending market collapse. A recalibration is timely even if we believe that many Singaporeans can still afford to buy another private residential property. Unfortunately, owing to widespread fear that the market is presently about to topple over, they may choose not to commit and in turn create a self-fulfilling prophecy. There comes a time when creating the right sentiment is more important than merely looking at the fundamentals,” he added.