Rents of luxury units declining: report

Posted on 28 Oct 2014 | Comments Off on Rents of luxury units declining: report

The average monthly gross rents of luxury/super-luxury apartment could decline by about 5 percent for the whole of 2014.

According to a recent research and forecast report by Colliers International, rents for these units have fallen 3.9 percent over the January to September period this year.

Specifically, it fell 0.5 percent quarter-on-quarter to $5.17 per sq ft per month as of Q3 2014, following the 1.4 percent quarter-on-quarter decline in Q2 2014.

“While tenants continued to enjoy stronger negotiating powers in light of the many choices available in the market, well-maintained and attractively-located homes were able to hold rents,” the report said.

The average capital value of luxury and super-luxury apartments softened by a steeper 2.1 percent quarter-on-quarter following Q2 2014’s 1.1 percent fall to $2,584 per sq ft. This is because acute affordability concerns is proving to be a formidable push factor.

For the last quarter of the year, Colliers International predicts leasing activities generally tend to slow down over the October to December year-end festive season. “With a mounting supply of high-end apartments vying for a limited pool of tenants amid an increasingly competitive leasing environment, this may exert further downward pressure on rents in Q4 2014,” the report said.

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HDB resale volume to hit 10-year low this year, report

Posted on 28 Oct 2014 | Comments Off on HDB resale volume to hit 10-year low this year, report

HDB resale volume is expected to hit to a 10-year low this year at around 16,500 to 17,000 units, while resale prices are expected to drop by as much as seven percent, according to PropNex and reported in the media.

HDB resale prices will continue to be affected by a looming flood of new homes as well as the continued impact of the government’s property cooling measures such as shorter loan tenure, lower mortgage servicing ratio and a three-year minimum waiting period for PRs looking to purchase HDB resale flats, the report said.

Meanwhile, 2015’s outlook also appears to be bleak, with a possible five to six percent full year drop.

“This is mainly due to the increased number of second timers collecting their keys to their new BTO flats, and they will have to sell their existing flats within six months. This figure is expected to be about 6,000 annually for the next two years,” said PropNex.

PropNex CEO Mohamed Ismail noted that home buyers are more restrained if their TDSR is near 60 percent or MSR is over 30 percent.

“Loan curbs and softer prices will ultimately mean that HDB upgraders will find it more prohibitive to upgrade to a private property,” he said.

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