Category Archives: Property Market / Real Estate

Resale condo values down 5-9% after TDSR ruling

Posted on 18 Oct 2014 | Comments Off on Resale condo values down 5-9% after TDSR ruling

Average resale values of completed freehold non-landed residential properties in Singapore’s luxury and prime areas fell the most in Q3 2014 from the quarter before – by 2.5 and 2.0 percent respectively, revealed DTZ.

The decline was lesser in the non-prime areas, with average freehold resale values dropping by 1.5 percent in Q3 from the previous three months.

Comparatively, leasehold values decreased slightly more by 2.0 percent in the period.

The report also stated that average resale values of non-landed residential properties have fallen by about 5.0 to 9.0 percent since the introduction of the TDSR framework at the end of June 2013.

Meanwhile, the landed property segment became weaker in Q3, with average resale prices falling at a faster rate compared to Q2 across both the prime and non-prime areas.

In prime districts 9, 10 and 11, only the detached segment stayed firm, but average resale prices of both semi-detached and terrace houses posted a 2.0 percent decline quarter-quarter in Q3.

Over in the suburban areas, average resale prices of freehold landed homes decreased by 2.2 percent in the third quarter, slightly faster than the previous 2.0 percent drop.

According to the consultancy, the private residential market remains a buyers’ market. “The increasing inventory from unsold units that have already been launched and upcoming launches will continue to provide buyers with many options and aid in sustaining a buyers’ market for the months ahead,” said Lee Lay Keng, DTZ’s Regional Head (SEA) Research.

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Falling property prices pose risk for economy

Posted on 18 Oct 2014 | Comments Off on Falling property prices pose risk for economy

Although Singapore’s falling construction activity is negatively affecting its economy, a sharp drop in property prices could pose a greater threat, according to media reports.

The city state’s economy grew by merely 1.2 percent in Q3 2014 on an annual basis based on figures published yesterday, while most economists polled by Reuters were expecting a 1.8 percent rise.

Specifically, the quarter’s weak GDP expansion is mainly attributed to slowing construction activity, with the sector suffering dismal growth of 1.4 percent compared to 4.1 percent in Q2 2014.

However, price corrections are of greater concern said CIMB bank’s Regional Economist Seng Wun Song.

“If the pace of the global economic recovery continues to plod along rather than pick up steam, the deceleration in Singapore asset prices could be sharper than the current 10-15 percent range, which would have repercussions on equities and for the wealth effect,” he explained.

Based on Knight Frank’s data, prices in Singapore’s prime housing market dropped by 7.3 percent in H1 2014. This segment comprises five percent of the most expensive residences in the country.

Nevertheless, a sharp decline in prices is likely to be precipitated by an external trigger from the global economy, said Mizuho Bank’s Market Economist Vishnu Varathan.

“For property to compound into a big risk you would need to see a very negative spillover from China, or the unlikely case of a faster-than-expected rate hike by the U.S. Federal Reserve,” he said.

A combination of these factors could lead to domestic demand drying up and prices stumbling, he added.

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