Monthly Archives: July 2014

Home prices seen dipping further for rest of 2014

Home prices seen dipping further for rest of 2014

Home prices seen dipping further for rest of 2014

Home prices seen dipping further for rest of 2014

Amid the current supply-demand imbalance, the gradual decline in private home prices is set to continue for the rest of the year after three quarters of decreases, say property consultants.

Including the 1.1 per cent quarter-on-quarter drop in the second quarter based on Urban Redevelopment Authority’s (URA) latest flash estimate, the official private home price index has shed 3.2 per cent in three straight quarters of declines after peaking in Q3 last year.

In the first half, the index has eased 2.3 per cent (comparing the latest Q2 number with that for Q4 2013) and consultants expect a 4-8 per cent full-year decline. Property consultants are forecasting a moderate price erosion – barring a recession or external shocks.

ERA’s key executive officer Eugene Lim reckons the softening rental market – which has been under pressure on the back of rising private housing completions and a slowdown in new demand due to reduced expat inflow – is also contributing to sliding home prices.

The 1.1 per cent drop in Q2 is smaller than Q1’s 1.3 per cent fall. That was probably due to prices of non-landed homes in the city fringe, or Rest of Central Region (RCR), easing at a slower clip of 0.6 per cent in the April-June quarter compared with the 3.3 per cent slide in the first three months.

Market watchers believe the RCR subindex in Q2 was probably supported by the launch of Kallang Riverside and Commonwealth Towers, with respective median prices of $2,111 per square foot and $1,626 psf achieved in their first month of launch.

In all other categories – non-landed private homes in Core Central Region (CCR) and Outside Central Region (OCR), as well as landed properties – the latest flash estimate Q2 price declines were bigger than in Q1 .

The 1.1 per cent contraction in suburban locations or OCR in Q2 (compared with a 0.1 per cent dip in Q1) is thought to be due to lower-priced units transacted at a number of projects – most notably The Panorama in Ang Mo Kio but also to a lesser extent, Vue 8 Residence in Pasir Ris, Riverbank @ Fernvale, The Tembusu in Kovan and The Skywoods in the Dairy Farm area.

The pace of price decline also gathered momentum for non-landed homes in CCR – which includes the traditional prime districts 9, 10 and 11, Downtown Core Planning Area and Sentosa. The subindex shrank 1.5 per cent in Q2 after falling 1.1 per cent in Q1.

This segment has posted the sharpest drop of 5 per cent after five consecutive quarters of decline since its recent peak (in Q1 2013), amid a slowdown in purchases by foreign buyers and investors due to the additional buyer’s stamp duty (ABSD).

Landed homes – long regarded as a bastion of strength in the Singapore property landscape due to their more limited supply – have also been seeing their prices crumble. URA’s subindex for this category eased 1.5 per cent in Q2, double the 0.7 per cent fall in Q1.

Source: Business Times – 2 July 2014

Robust demand for office space in Q2

Robust demand for office space in Q2

Robust demand for office space in Q2

Robust demand for office space in Q2

Singapore’s office property market saw stronger demand in the second quarter this year, all Grade A office micro-markets across the island have reached near-full occupancy rate at beyond 95 per cent.

According to the quarterly research report, the Shenton Way/Tanjong Pagar micro-market saw the highest occupancy rate of 99.4 per cent, up from 97.2 per cent in the first quarter. Demand came from a myriad of industries such as oil and gas, insurance, telecommunications and pharmaceuticals.

Upcoming office projects are also beginning to see some interest. CapitaGreen has achieved almost 12 per cent pre-commitment rate as at end-June. The project is expected to be completed by the year-end. Meanwhile, the landlord of South Beach Tower, expected to come on stream in the last quarter of this year, is reportedly in advance discussions to lease out another 20,000 sq ft of space.

The sales market also saw its fair share of activity. Strata-titled sales volume was supported by continued sales of new strata-titled office units at Vision Exchange at Venture Avenue.

Family-run businesses seeking investment opportunities also kept en bloc office investment sales activity up. A consortium comprising KOP Ltd, Lian Beng Group, KSH Holdings and Centurion Global acquired a 92.8 per cent stake in Prudential Tower for $512 million, or $2,316 per sq ft of net lettable area.

Average capital value of Premium Grade office space in the Raffles Place/New Downtown micro-market rose 0.9 per cent in the second quarter from the previous quarter to $2,692 per sq ft, while that for Grade A office space inched up 0.8 per cent to $2,420 per sq ft.

Source: Business Times – 1 July 2014

Right time to review cooling measures: Kwek Leng Beng

Right time to review cooling measures: Kwek Leng Beng

Right time to review cooling measures

Right time to review cooling measures

Veteran property developer Kwek Leng Beng fears Singapore could lose its edge as an investment destination unless the Government reviews its property cooling measures.

Mr Kwek, executive chairman of Hong Leong Group Singapore and City Developments, said foreigners were choosing to plough their investment dollars into countries like Britain, Australia and the US over Singapore, while Singaporeans have been investing abroad.

“We are losing these investments to other countries even though these foreign properties have a higher risk profile,” Mr Kwek told The Straits Times yesterday. “It is unlikely these investment dollars will return to Singapore.”

He noted the unexpected decline in Singapore’s manufacturing activity in May, adding that it is crucial to ensure that the property sector is in good health as it is a crucial pillar of the economy.

“The overall picture seems to suggest that it may be timely now for the Government to take another look at the cooling measures introduced and make adjustments accordingly,” he said.

Mr Kwek’s comments came as the Total Debt Servicing Ratio (TDSR) loans framework, which aims to deter borrowers from accumulating too much debt, hit its one-year mark on Sunday.

The measure, together with the Additional Buyer’s Stamp Duty (ABSD), has hammered demand in the market.

New home sales in the first five months of this year plunged 52 per cent to 3,984 units from the same period a year ago, according to fresh estimates from the Urban Redevelopment Authority.

Industry players echoed Mr Kwek’s sentiments, pointing out that even if the ABSD is eased, it is unlikely to encourage more speculative buying.

Mr Kwek suggested in February that the Government consider lifting the hefty 15 per cent duty levied on foreigners buying homes after the property market and global economy showed signs of slowing. Prices have since fallen, confirming his concerns, he said yesterday.

However, Mr Kwek noted that the different segments have been affected to varying degrees, so there is no blanket solution.

“I have confidence the Government will take appropriate measures to deal with the challenges that Singapore faces,” he said.

Source: The Straits Times – 1 July 2014

Too early to relax property cooling measures, says MND

Too early to relax property cooling measures, says MND

Central Region share of GLS confirmed list on the rise

Too early to relax property cooling measures, says MND

It is still too early to roll back property cooling measures, according to the Ministry of National Development (MND) yesterday.

It said that although home sales have decreased, prices have remained relatively stable.

The moves to rein in property prices included extra stamp duties to curb speculative buying and the total debt servicing ratio framework which was introduced a year ago.

MND noted that private home prices had surged 60 per cent during the most recent market upswing that began in mid-2009.

“It is still too early to relax the property market cooling measures,” said a spokesman. “If the measures are removed prematurely, we could see a sharp increase in demand and housing prices.”

He said the objective was to “ensure a stable and sustainable property market”.

Deputy Prime Minister Tharman Shanmugaratnam noted in his Budget speech in February that given the run-up in prices in the last four years, it is too early to start relaxing our measures.

The MND’s comments came as prominent developer Kwek Leng Beng warned of a potential impact on Singapore’s reputation as a global city, and called for a review of the policy measures.

The National University of Singapore’s Residential Price Index out yesterday showed that prices of resale homes climbed 0.8 per cent in May from April, after falling for nine months. The Urban Redevelopment Authority’s flash estimates for private home prices will be out today.

Source: The Straits Times – 1 July 2014

NUS price index for private homes up 0.8% in May

NUS price index for private homes up 0.8% in May

Price cuts at prime central private homes too

NUS price index for private homes up 0.8% in May

National University of Singapore’s (NUS) price indices for completed non-landed private homes rose month on month in May, after straight declines for several months. Its latest flash estimate shows that the Overall Singapore Residential Price Index (SRPI) rose 0.8 per cent in May from the revised value for April – after slipping one per cent in April over the previous month.

The increase marked the first gain for the index after nine consecutive months of declines between August 2013 and April this year. May’s flash estimate is down 6.3 per cent from the recent peak in July 2013. Year on year, the May index value is down 6 per cent.

Commenting on the month-on-month appreciation based on the May flash estimate, associate professor Lum Sau Kim of the university’s Department of Real Estate said the May indices were “perhaps boosted in part by the more active sales in the primary market during May”.

“Going forward, the lower activity that is often the case in June may result in a small dip in the indices.

“Our general view based on the evidence thus far suggests that the market seems to be moderating slowly, with price levels that are still high due to the strength of holding power of many participants. The effects of newly completing supply have yet to kick in to induce larger price corrections for completed non-landed private homes,” she added.

NUS’s flash estimates yesterday showed the SRPI for Central Region (excluding small units of up to 506 sq ft) rose 0.7 per cent month on month in May, after easing 0.1 per cent in April. The latest May flash estimate reflects a 7.5 per cent year-on-year drop.

Central Region is defined as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11 by the university’s Institute of Real Estate Studies, which minted the SRPI series tracking prices of completed private apartments and condos (excluding executive condos).

The sub-index for Non-Central Region, again excluding small units, rose 0.8 per cent in May after sliding 1.9 per cent in April. The May figure translates to a 5 per cent year-on-year drop.

Prices of small apartments and condo units (up to 506 sq ft) islandwide climbed 0.8 per cent in May – against April’s one per cent decrease. Year-on-year, the drop is 3.1 per cent. This is the smallest decrease of the four indices.

Source: Business Times – 1 July 2014

NUS price index for private homes up 0.8% in May

NUS price index for private homes up 0.8% in May

Price cuts at prime central private homes too

NUS price index for private homes up 0.8% in May

National University of Singapore’s (NUS) price indices for completed non-landed private homes rose month on month in May, after straight declines for several months. Its latest flash estimate shows that the Overall Singapore Residential Price Index (SRPI) rose 0.8 per cent in May from the revised value for April – after slipping one per cent in April over the previous month.

The increase marked the first gain for the index after nine consecutive months of declines between August 2013 and April this year. May’s flash estimate is down 6.3 per cent from the recent peak in July 2013. Year on year, the May index value is down 6 per cent.

Commenting on the month-on-month appreciation based on the May flash estimate, associate professor Lum Sau Kim of the university’s Department of Real Estate said the May indices were “perhaps boosted in part by the more active sales in the primary market during May”.

“Going forward, the lower activity that is often the case in June may result in a small dip in the indices.

“Our general view based on the evidence thus far suggests that the market seems to be moderating slowly, with price levels that are still high due to the strength of holding power of many participants. The effects of newly completing supply have yet to kick in to induce larger price corrections for completed non-landed private homes,” she added.

NUS’s flash estimates yesterday showed the SRPI for Central Region (excluding small units of up to 506 sq ft) rose 0.7 per cent month on month in May, after easing 0.1 per cent in April. The latest May flash estimate reflects a 7.5 per cent year-on-year drop.

Central Region is defined as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11 by the university’s Institute of Real Estate Studies, which minted the SRPI series tracking prices of completed private apartments and condos (excluding executive condos).

The sub-index for Non-Central Region, again excluding small units, rose 0.8 per cent in May after sliding 1.9 per cent in April. The May figure translates to a 5 per cent year-on-year drop.

Prices of small apartments and condo units (up to 506 sq ft) islandwide climbed 0.8 per cent in May – against April’s one per cent decrease. Year-on-year, the drop is 3.1 per cent. This is the smallest decrease of the four indices.

Source: Business Times – 1 July 2014