Tag Archives: Private Home Prices

Private home prices down 0.7% in Q1

Prices of private residential properties in Singapore fell by 0.7 percent in the first quarter of 2016, compared to the 0.5 percent decline in the previous quarter, according to complete data released by the Urban Redevelopment Authority (URA) on Friday, 22 April.

In the Outside Central Region (OCR), prices dropped by 1.3 percent after remaining unchanged in the previous quarter. Prices of non-landed properties in the Rest of Central Region (RCR) remained unchanged, compared to the previous 0.4 percent decline. Prices of non-landed properties in the Core Central Region (CCR) rose by 0.3 percent, compared to the previous 0.3 percent decline. Prices of landed properties fell by 1.1 percent, compared to the 1.8 percent decrease in the previous quarter.

Property Price Index of private residential properties

Source: URA

Rentals of private residential properties fell by 1.3 percent in Q1 2016, the same rate of decline as in the previous quarter.

Rental prices fell across all segments of the market. Rentals of non-landed properties fell by 1.7 percent in the CCR, 0.6 percent in the RCR and 1.2 percent in the OCR, compared to declines of 0.4 percent, 1.6 percent and 1.8 percent respectively in the previous quarter. Meanwhile, rentals of landed properties declined by 2.2 percent, compared with the 2.3 percent decline in the previous quarter.

Excluding executive condominiums (ECs), developers launched 953 uncompleted private condos for sale in Q1, compared to the 1,333 units in the previous quarter. As for ECs, developers launched 534 units for sale, compared to the 505 units launched previously.

Meanwhile, developers sold a total of 1,419 units, excluding ECs, in Q1, compared to the 1,603 units sold in the previous quarter. As for ECs, they sold 762 units over the same period, compared to 573 in the previous three-month period.

Lewis Ng, Managing Director, PropertyGuru Singapore, said: “While the residential property market saw overall prices and transactions fall by 0.7 percent and 11 percent respectively, PropertyGuru saw an eight percent increase in queries for properties for sale over the same period.

“This indicates that Singaporeans are still greatly interested in the property market, doing their research and viewing properties. Many consumers are just biding their time for prices to drop sufficiently, and exploring their options thoroughly before buying a home.”

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S’pore may ease cooling measures in second half of 2016

Property cooling measures in Singapore could be eased as early as the second half of 2016 if private home prices continue falling, revealed Donald Han, Managing Director of Chesterton Singapore, at a luncheon hosted by Credit Suisse for its Singapore investors.

He believes a price drop of around 15 percent is likely to prompt an adjustment of current housing policies, given the small buffer before property owners slip into negative equity.

The Urban Redevelopment Authority’s (URA) residential price index has recorded an eight percent slide from the peak in Q3 2013.

As a result, property measures could be relaxed in 2H 2016, with rising interest rates acting as the “9th cooling measure”, shared Han.

“A reduction in the ABSD (Additional Buyer’s Stamp Duty) is most likely, but a reduction in the SSD (Seller’s Stamp Duty) could also materialise, should there be higher instances of mortgagee sales. The TDSR (Total Debt Servicing Ratio) is unlikely to be removed, however.

“Despite the easing of cooling measures and demand from PRs waiting to purchase, prices are only expected to bottom in 2018. New sales of 7,000 to 8,000 units are likely to be the new norm, with current unsold stock of around 24,000 units requiring three years to clear.”

Easing of cooling measures

Meanwhile, mass market homes are expected to see the fastest erosion in prices as the bulk of private supply is within the Outside Central Region (OCR), said Han. In addition, he predicts the large supply of up to 20,000 HDB flats in 2016 will put further pressure on suburban home prices.

This comes on the back of the “Bidadari” effect, where strong demand was seen in the November Build-To-Order (BTO) launch, which saw 5-room flats oversubscribed by 23 times.

In a report, Credit Suisse added: “We believe the stage is set for a pre-emptive re-calibration of cooling measures in 2H 2016, given persistent oversupply, speculative activity and foreign demand that have been curbed, while income growth has outpaced home prices. This would be a key re-rating catalyst for the sector.”

The Zurich-based firm has rated City Developments Limited (CDL) as its top pick among property developers, as “CDL is also best positioned for a turnaround in the Singapore residential market sentiment in 2016″.