Tag Archives: New Private Home Prices

Property trough in sight: CBRE

Compared to the robust market conditions seen in 2013, sales of new private homes in the last two years have been severely depressed, with transactions halving to 7,300 units in 2014 and 7,440 units last year, according to CBRE Research.

The report stated that Singapore’s housing market is likely to remain flat this year as demand continues to be hindered by the property cooling measures, economic slowdown and rising interest rates.

As sales have slowed, developers are finding themselves stuck with many unsold units, but the situation is not as bad as before. The number of uncompleted unsold units fell to 23,000 at the end of 2015 from nearly 27,000 in 2014, said CBRE.

“The reduction is due to lesser new projects being added due to fewer sites being sold in 2015, translating to a limited new supply going forward.”

Meanwhile, the private property price index has dropped by 8.4 percent since peaking in Q3 2013. Specifically, the price gap between the Core Central Region and the outer regions have narrowed, presenting a window of opportunity for investors looking for good deals in the prime market, noted the consultancy.

It believes that after suffering nine quarters of price and volume adjustments, the trough may be in sight as supply runs low and prices reach an equilibrium.

“Should the government relax the existing cooling measures, it may stoke buying interest. When that happens, the window of opportunity will narrow and prices might see some upside as early as 2018, led by the prime segment.”

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URA data: Too early for optimism

Friday’s private new home sales data was driven mainly by two newly- launched large projects, and according to real estate agency JLL:: “… while it can be said there has been an improvement in primary market activity it would be premature to say that market confidence is returning.”

Besides the top-selling Northpark Residences and Botanique at Bartley, other projects to register significant sales during April were Sims Urban Oasis (41 units at a median price of S$1,411 per sq ft), The Panorama (39 units at a median price of S$1,229 per sq ft) and Symphony Suites (29 units at a median price of S$1,042 per sq ft).

In terms of market segment, Outside Central Region (OCR) still dominated market share, accounting for 86.7 percent of April’s developer sales of private homes. Rest of Central Region (RCR) accounted for 10.1 percent while 3.2 percent of sales went to the Core Central Region (CCR).

Ong Teck Hui, National Director, Research and Consultancy at JLL, said: “Northpark Residences, being a unique development integrating retail, residential and transport connectivity, was definitely a market mover, drawing much interest.

“In this challenging market a developer who has a unique product offering also has a competitive advantage in attracting buyers. Without that, it would purely be a pricing game, which makes it much harder to compete against other projects.

“Subsequent months’ sales performance will depend on the sales progress of the large projects launched recently, and whether there will be significant fresh launches to keep the momentum going.”

JLL April 2015 URA data Singapore private homes