Monthly Archives: April 2013

Release of 1st Quarter 2013 real estate statistics

Posted on 27 Apr 2013 | Comments Off on Release of 1st Quarter 2013 real estate statistics

The Urban Redevelopment Authority (URA) released today the real estate statistics for 1st Quarter 2013.

PRIVATE RESIDENTIAL PROPERTIES

Prices and Rentals

Prices of private residential properties increased by 0.6% in 1st Quarter 2013, reflecting a significant moderation in the 1.8% price growth recorded in 4th Quarter 2012.

The moderation in price growth of non-landed properties was seen across all three market segments. It was most pronounced in the Rest of Central Region (RCR), where the rate of increase fell to 0.2%, compared to 0.9% in 4th Quarter 2012. Similarly, price growth in the Outside Central Region (OCR) slipped to 1.4% from the 3.8% increase in the previous quarter. Prices in the Core Central Region (CCR)1 increased by 0.6%, compared to 0.7% previously (see Annexes A-1, A-2 & A-62).

Rentals of private residential properties increased 0.8% in 1st Quarter 2013, which was marginally higher than the 0.7% increase in 4th Quarter 2012 (see Annexes A-3 & A-4).

Launches and Take-up

Developers launched 5,546 uncompleted private residential units (excluding ECs) for sale in 1st Quarter 2013, higher than the 3,408 units in 4th Quarter 2012 (see Annex C-1).

Developers sold 5,412 private residential units in 1st Quarter 2013, compared with the 4,353 units in 4th Quarter 2012 (see Annex D).

No new EC units were launched for sale in 1st Quarter 2013 (see Annex F). Developers sold 725 EC units in 1st Quarter 2013, or less than half the 1,682 units sold in 4th Quarter 2012.

Resales and Sub-sales

The volume of resale transactions decreased sharply, from 3,447 units in 4th Quarter 2012 to 1,871 units in 1st Quarter 2013. As a proportion of all sale transactions, resale transactions fell to 24.5% from 40.8% in the previous quarter (see Annex D).

Sub-sales accounted for 4.5% of all sale transactions in 1st Quarter 2013, lower than the 7.7% recorded in 4th Quarter 2012 (see Annex D).

Supply in the Pipeline

As at the end of 1st Quarter 2013, the total supply of uncompleted private residential units in the pipeline has hit 88,6233, higher than the 86,475 units in 4th Quarter 20124 (see Annexes E-1 & E-25). Of this, 35,564 units remained unsold as at 1st Quarter 2013 (see Annexes B-1 & B-2). There is an additional supply of 11,938 EC units in the pipeline. The cumulative figure of 100,561 units in the pipeline supply is the highest recorded since data was first made available in 2001.

In addition, another 9,920 units will soon be added to the pipeline supply. These units are from Government Land Sales (GLS) sites that had been awarded to developers, but for which planning approvals have not yet been obtained as of 1st Quarter 2013, as well as from Confirmed List sites from the 1H2013 GLS Programme that have not yet been awarded (see Annex E-3). If these units are included, there will be close to 110,481 private housing and EC units in the overall pipeline supply, many of which are expected to be completed in the next 3 to 4 years.

Based on the expected completion dates reported by developers, there will be 18,400 units completed in 2013, which is the highest number recorded since the 14,600 completions in 1997.

Stock and Vacancy

The stock of completed private residential units increased by 2,204 units in 1st Quarter 2013. The vacancy rate of completed private residential units decreased from 5.4% at the end of 4th Quarter 2012 to 5.2% at the end of 1st Quarter 2013 (see Annex E-1).

OFFICE SPACE

Prices and Rentals

Rentals for office space continued their fall, decreasing 0.2% in 1st Quarter 2013, after declining 0.3% in 4th Quarter 2012 (see Annexes A-3 & A-5). Prices of office space rose 2.1% in 1st Quarter 2013, compared with the increase of 0.3% in the previous quarter (see Annex A-1).

Supply in the Pipeline

At the end of 1st Quarter 2013, there was a total supply of about 1.164 million sq m GFA of office space in the pipeline (see Annexes E-1 & E-2).

Stock and Vacancy

The amount of occupied office space increased by 25,000 sq m (nett) in 1st Quarter 2013, compared to the 17,000 sq m (nett) increase in the previous quarter. On the other hand, the stock of office space increased by 16,000 sq m (nett) in 1st Quarter 2013. As a result, the island-wide vacancy rate of office space as at the end of 1st Quarter 2013 decreased marginally to 9.2%, from 9.4% at the end of 4th Quarter 2012 (see Annexes A-5 & E-1).

SHOP SPACE

Prices and Rentals

Rentals for shop space declined by 0.6% in 1st Quarter 2013, after an increase of 0.2% in 4th Quarter 2012 (see Annexes A-3 & A-5). Prices of shop space increased by 2.1% in 1st Quarter 2013, after posting a 0.2% decline in the previous quarter (see Annex A-1).

Supply in the Pipeline

At the end of 1st Quarter 2013, there was a total supply of 639,000 sq m GFA of shop space from projects in the pipeline (see Annexes E-1 & E-2).

Stock and Vacancy

The amount of occupied shop space decreased by 22,000 sq m (nett) in 1st Quarter 2013. The stock of shop space decreased by 13,000 sq m (nett) in 1st Quarter 2013. As a result, the island-wide vacancy rate of shop space rose to 5.5% at the end of 1st Quarter 2013, from 5.2% at the end of 4th Quarter 2012 (see Annexes A-5 & E-1).

INDUSTRIAL SPACE

Prices and Rentals

Prices of multiple-user factory space increased by 2.9% in 1st Quarter 2013, compared with the decline of 2.7% in the previous quarter (see Annex A-1). Rentals of multiple-user factory space increased by 0.4% in 1st Quarter 2013, which was significantly lower than the 3.9% increase in the previous quarter (see Annex A-3).

Supply in the Pipeline

As at the end of 1st Quarter 2013, there was a total supply of 4.514 million sq m GFA of factory space from projects in the pipeline (see Annexes E-1 & E-2).

Stock and Vacancy

The amount of occupied factory space increased by 83,000 sq m (nett) in 1st Quarter 2013, lower than the increase of 229,000 sq m (nett) in 4th Quarter 2012. On the other hand, the stock of factory space increased by 100,000 sq m (nett) in 1st Quarter 2013. The vacancy rate of factory space increased from 6.9% at the end of 4th Quarter 2012 to 7.0% at the end of 1st Quarter 2013 (see Annex E-1).

More information on REALIS can be found at http://spring.ura.gov.sg/lad/ore/login/index.cfm.

Summary of Key Information for 1st Quarter 2013

Annex Title
Annex A-1 Comparison of Property Price Index for 4th Quarter 2012 and 1st Quarter 2013
Annex A-2 Price Indices of Non-Landed Properties by Locality and Completion Status
Annex A-3 Comparison of Rental Index for 4th Quarter 2012 and 1st Quarter 2013
Annex A-4 Rental Indices of Non-Landed Properties by Locality
Annex A-5 Median Rentals and Vacancy of Office and Shop Space
Annex A-6 Chart of Property Price Index by Type of Property
Annex A-7 Chart of Residential Property Price Index by Type
Annex B-1 Number of Unsold Private Residential Units from Projects with Planning Approvals
Annex B-2 Number of Unsold Private Residential Units from Projects with Planning Approvals by Market Segment
Annex C-1 Number of Uncompleted Private Residential Units Launched in the Quarter by Market Segment
Annex C-2 Number of Private Residential Units Sold in the Quarter by Market Segment
Annex C-3 Number of Private Residential Units sold by Size and Price
Annex D Number of New Sale, Sub-Sale and Resale Transactions for Private Residential Units by Market Segment
Annex E-1 Stock & Vacancy and Supply in the Pipeline as at End of 1st Quarter 2013
Annex E-2 Supply in the Pipeline by Development Status and Expected Year of Completion as at End of 1st Quarter 2013
Annex E-3 Pipeline Supply of Private Residential Units and Executive Condominiums by Expected Year of Completion
Annex F Number of Executive Condominium Units Launched and Sold in the Quarter

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Khaw hints at changes in EC scheme

Posted on 27 Apr 2013 | Comments Off on Khaw hints at changes in EC scheme

National Development Minister Khaw Boon Wan has said the government loses “hundreds of millions” of dollars when constructing public flats.

He made the point on Thursday night at a dialogue session on housing issues.

This comes amid calls from some quarters for land costs to be taken out from the pricing of public flats to make them more affordable.

Mr Khaw also hinted at several other changes to come, such as subsidies for executive condominiums.

During the national conversation session on housing issues, many were concerned about the affordability of home prices.

Evalyn Khoo, a mother of two, said: “I’m concerned about the home asset value. I’m also concerned about how the younger generation can actually afford a house for themselves in the future.”

Participant Philip Lee said: “I think in the past three years or so, there has been more anxiety in the market because even Singaporeans couldn’t get properties through the Build-To-Order (scheme) and they have to resort to the resale market and I think if there is sufficient supply channelled to BTO, we may see more happy Singaporeans and possibly less demand in the resale market and hopefully the prices will be within range.”

With regard to calls for price of new Build-To-Order (BTO) flats to be de-linked from land costs, Mr Khaw said it may be politically easy to say land is free because it belongs to everybody, but that is not the case.

He said the price of land is tied to acquisition costs, reclamation and the building of infrastructure around it.

Mr Khaw said: “You need to acquire a piece of land; you need to reclaim a piece of land. All those costs money to taxpayers and we are just trustees of taxpayers and those costs are to be accounted for. And even when you have got that land prepared, land is only valuable when we invest in infrastructure, roads, MRT… And all those costs billions of dollars. So to say that land cost is a pittance and therefore should be excluded from total construction costs… I myself think it is not quite an appropriate argument.”

He also revealed that the Housing and Development Board, which is the developer for public housing, is losing money for every flat it sells.

He said: “Every year, hundreds of millions of dollars of losses were incurred by the HDB and that’s why MOF (Ministry of Finance) has to give the HDB an annual grant, otherwise the HDB will be in the red. It cannot be forever in the red, because there’s no way it can make money. Because every unit that we sell, we lose money, HDB loses money. The accounting for the HDB is deficit accounting. So if you incur a S$300-million loss, there is a grant of S$300 million that covers it. That is how we operate the HDB.

“Let us not perpetuate this talk about HDB is making money out of building houses because if it was so simple, life would be straightforward, but that’s not the case.”

The HDB pays market rate for its land and construction costs. When it prices flats below market rate, it incurs a housing deficit.

A recent report said the deficit is now in the region of about S$1 billion a year, including other costs such as upgrading.

The National Development Ministry told Channel NewsAsia: “The cost of building HDB flats includes the cost of land, design, construction, financing and other project-related costs. It varies from project to project and year to year. Averaging over the past three years, the Home Ownership Programme costs HDB S$874 million per year.”

Mr Khaw added that the government has to offer more subsidies with its ramped-up flat supply.

One area where subsidies are being reviewed is that for executive condominiums (ECs), which cater to Singaporeans who can afford more than an HDB flat, but find private property out of their reach.

The current household income ceiling for executive condominiums is S$12,000.

Mr Khaw said: “There is this sense of inequity here that the lower-income group is getting lower subsidies than somebody who is earning S$12,000, so something is wrong somewhere and therefore I think we cannot carry on the EC in this current mode.”

Mr Khaw also said he is confident that he can bring down the price of new flats in non-mature estates to four times the annual median salary of a buyer – down 30 per cent from the current 5.5 times. He is wary of some “transitional problems”.

He said there needs to be “distinct differentiation” between the cheaper new flats and those built earlier.

Mr Khaw said both the MND and HDB will need to sort out this issue over the next few months.

He said: “I am fairly confident of being able to do it but some groups already anticipate transitional problems, which is what I got to sort out. If yesterday you bought (a flat) at five and half years’ salary and tomorrow HDB announces a new pricing package, which is only (priced at) four years’ salary, you are going to cry ‘blue murder’ right?

“Therefore, I think we should not be prevented from offering a new pricing model but obviously there must be a distinct differentiation between the two products to explain why one is five and a half years and the one is four years.”

The national conversation session is the second in a series of about 10 dialogue sessions on housing issues. Participants were first broken up in small groups of six and then came together in a larger group where the conversation continued. The aim is to gather feedback from Singaporeans to shape future housing policies.

The topic of affordability will be further discussed at a future Our Singapore Conversation discussion.

Details can be found on http://www.mnd.gov.sg/HomeSweetHome

Source : CNA – 26 Apr 2013

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